What is debt

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What is debt?

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introduction Debt is money owed by one party, the borrower or debtor, to a second party, the lender or creditor. The borrower may be a sovereign state or country, local government, company, or an individual

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Debt is an amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest

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There are many different types of consumer debts. The most common debts collected upon by debt collectors are credit card debts, medical debts, and student loan debts. There are others, such as personal loans, cell phone bills, utility bills, bank overdraft charges, auto loans, payday loans to name some more.

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Secured Debt Secured debt is any debt backed by an asset for collateral purposes. A credit check is necessary for the lender to judge how responsibly you handle debt, but the asset is pledged to the lender in case you do not repay the loan. Unsecured Debt Unsecured debt lacks any collateral. When a lender makes a loan with no asset held as collateral, it does so only on the faith in your ability and promise to repay the loan.

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Revolving Debt Revolving debt is an agreement made between a lender and consumer that enables the consumer to borrow an amount up to a maximum limit on a recurring basis. A line of credit and credit card are examples of revolving debt Mortgages Mortgages are probably the most common and largest debt many consumers carry. Mortgages are loans made to purchase homes, with the subject real estate serving as collateral on the loan.

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How escape from debt Take a cash advance on another card. The expression "robbing Peter to pay Paul" comes to mind with this one. ... Get a payday advance against your next pay check. ... Get a home equity loan and pay off everything. ... Right ways to escape credit card debt. Try for Free Debt Advice

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Slash Your Cost Of Debt This may sound obvious, but part of the reason you can’t get out of debt is because you have too much debt to begin with. That debt needs to be serviced each and every month, and it’s taking a big chunk out of your pay check. Reduce Cost Of Living We certainly don’t want to get into “the devil made me do it” excuses, but there are factors beyond our control that contribute to debt. Wants vs Needs  One of the emotional limitations of living in a prosperous world is that we come to see wants as needs.  More Income Debt is usually the result of an imbalance between income and expenses. 

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About us Our main aim is Free government debt advice to help guide as many people as possible through the process of relieving themselves of hefty debt and the intense stress that comes with it whilst maintaining our outstanding reputation for delivering a first-rate customer service experience

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Contact us Debt Free Advice Email: feedback@debtfreeadvice.co.uk Phone: 0800 781 7615

Summary: Debt is money owed by one party, the borrower or debtor, to a second party, the lender or creditor. The borrower may be a sovereign state or country, local government, company, or an individual

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