For most of us, borrowing money is a fact of life. It has to be done. While cash can be used for most things, a completely cash lifestyle just isn’t practical in a world where your ability to manage your credit affects non-loan aspects of your finances (like getting a job or an apartment) as well as whether or not you can get a loan. Like anything financial, it is a good idea to plan your borrowing. You are more likely to avoid the traps of a debt lifestyle if you are careful about when you borrow, and what you borrow for. Here are 3 simple tips for borrowing smart.

1. Only Borrow What You Need

Not too long ago, the conventional wisdom said that some debt was “good” and other debt was “bad.” The debate still rages over whether or not mortgage debt and student loan debt is “good.” However, many people — and I’m one of them — consider debt for education and buying a home as acceptable, even if it isn’t exactly “good.” Just because it’s acceptable, though, doesn’t give you an excuse to get carried away. Think about what you need, and borrow as little as you can get away with.

In the case of education, it may mean going to a less expensive school, saving up, and looking for a part-time and/or scholarship to reduce the amount that needs to be borrowed. For a home, it means considering a home that meets your needs, without getting too carried away with homes that might be a little bit beyond your means. Just because someone will approve you for a loan, doesn’t mean you should borrow that much. Whether it’s for a car, education or a home, borrow as little as you possibly can.

The same rule applies if you are using a credit card to build your credit history. Charge only a small amount each month, rather than putting large purchases that you don’t actually have the money for on your credit card.

2. Get the Best Interest Rate

Your interest rate can affect how much you pay over the long haul on your loan. Interest is what you pay for the privilege of borrowing the money; you don’t get any goods or experiences in exchange for the interest you pay. The higher your interest rate, the more interest you pay, increasing the amount of your money going directly into someone else’s pocket.

Part of getting the best interest rate is shopping around and getting different loan rates, and choosing the lowest you can get. The other part is making sure that you are eligible for a good interest rate on your loan. This means that you need to pay attention to cultivating a good credit score. Make your payments on time, keep your debt level low, and display responsible financial behavior. If you have a good credit score, you will be eligible for the best interest rates.

3. Pay Your Debt Off as Quickly as Possible

Finally, whenever you borrow money, you should have a plan to pay it off as quickly as you possibly can. Get the shortest loan term you can manage, and if you have to get a longer loan term, make it a point to pay a little extra toward the principal whenever possible. When building credit with a card, make sure that you pay off whatever you charge within two or three months.

Save up money ahead of time to make a down payment, or to pay for something you buy using a credit card. The faster you pay off your loan, the less interest you pay. Make sure that any loan agreement you sign does not have a prepayment penalty.

It is possible to borrow smart, without things getting out of hand. But it helps to have a plan to pay the debt off quickly, and to borrow as little as possible to begin with.