When we talk about debt, we usually consider the total amount we owe, regardless of how it accumulates or owes it. Payday loan debt is included. While some of us may be defined as debt through home mortgages or student loans, for others, debt may depend on our past financial errors. No matter how much we owe, how long we have to pay off our debts, or how we get there… are considered debt. Only when we look at each debt individually can we understand all the different types of debt. It was at that time that we could respect the fact that whether we owe a family or a payday lender $1 or $1 million, we all want to return what we borrowed, because it is all considered debt.
* Mortgage Debt ~ This definition of debt is the first mortgage of a home, a home equity line of credit, or any other loan that is secured by certain property or real estate. The lien will remain on the property until the loan is paid off. This type of debt may carry an adjustable rate mortgage [ARM], which can exceed a fixed rate over time, while a fixed rate remains constant over the life of the loan. With a home equity line of credit [also known as a “second mortgage”], the lender can only be repaid after the first mortgage has been paid in full. The average repayment period for a home mortgage or credit line is 15 or 30 years, but ARM also has a 10 year lifespan.
* Auto Loan ~ Debt generated by a car loan refers to borrowing a certain amount of purchase money and then repaying it monthly [usually 24-60 months] for a fixed period of time. Unless the borrower decides to refinance a lower monthly repayment amount, the interest rate will remain fixed during the loan term.
* Payday Loans ~ Payday Loans are short-term temporary loans designed to help people solve urgent financial problems or unexpected expenses. They are unsecured and can be approved without a mortgage. Most lenders do not require a credit history. Borrowers are expected to pay off their loans with the next check, but payday loan lenders usually extend a person's repayment period. The interest rate is higher than most loans and is fixed. The type of loan is best for people who can quickly repay the loan.
* Student loans ~ usually provided by the federal government, this debt is used for higher education. Interest rates are usually much lower than other forms of debt, and the repayment period is usually 10 years, giving the borrower enough time to graduate, find paid work and repay the loan. The balance of these loans can be very high, depending on where the borrower is attending school, the time required to complete the course, and the number of degrees offered.
* Credit Card ~ This debt comes from the purchase of goods and services without the need to pay in advance. The creditor approves the amount specified by the cardholder, as long as they repay on time and at least the minimum amount required per month, they can be recycled. The interest rate is based on the borrower's credit score and can be one of the highest rates of interest paid in all forms of debt.
Although lending is a good and sometimes a necessary financial tool, it is important to understand this. from
How each debt works from
And the best financial situation for you.