Initially debt looks attractive to everyone, but once you get associated with any debt, it becomes a headache to repay it. Below are some of the main types of debt which you may have to deal with at some stage of your life
* Secured debt – In this type of debt, [...]
Initially debt looks attractive to everyone, but once you get associated with any debt, it becomes a headache to repay it. Below are some of the main types of debt which you may have to deal with at some stage of your life
* Secured debt – In this type of debt, the debtor is required to mortgage any of their valuable assets. This means that the debtors assure from their side that if they are unable to repay their debt within the stipulated time period, the creditor has all the rights to sell their underlying assets to get their money back. Normally, mortgaging of your house is not advisable because if you tend to be a defaulter, then you may have to lose your house.
* Unsecured debt – This is just the opposite of the secured type of debt. Here you are not required to mortgage any of your assets, but the creditor can move you to any court of law if in case you tend to become a defaulter. This type of debt is riskier from the creditor side, but a little safer for the borrower.
* Credit card debt – This type of debt is procured when you pay towards your expenses from your credit card. Here, the financial institution which has issued you the card becomes your creditor and you become the debtor. The interest charged in this type of debt is somewhat higher than other debts.
No related posts.
