The Main Types of Debt and Repayment Strategies Basically, you can think of any individual personal debt as combining one of two broad categories of debt with one of two repayment strategies. The two broad categories of debt are: Secured debt: You offer some form of property that the lender...
CMOs take the cash flow from pass-throughs and segregate it into different bond classes known as tranches, which provide a time frame, or window, during which repayment is expected. This gives investors some level of payment predictability. The tranches prioritize the distribution of principal paym...
The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only
Chapter 13is a three- or five-year court-approved repayment plan, based on your income and debts. If you are able to stick with the plan for its full term, the remaining unsecured debt is discharged. If you are able to keep up with payments (a majority of people are not), you will...
The point is simple: Don't just take the math at face value, and always make sure you know about additional charges, fees, the term of a loan, minimum payment amounts, and other factors before doing a debt consolidation. For mo...
What are the interest rate, loan terms, and fees? Understand the interest rate on the loan, whether it’s fixed or adjustable, and how it will impact your monthly payments and overall cost of borrowing. Additionally, you should inquire about the duration of the loan, repayment schedule, and...
How do I know if I need debt consolidation? This depends on your situation. Suppose you have multiple debts you're paying for with high-interest rates. In that case, debt consolidation is a good idea to avoid the likelihood of missing a payment or spending too much interest. ...
Payday loans are an extreme example of bad debt. That’s because the interest rate on a payday loan can goas high as 700 percent in some states, and lenders may impose extremely aggressive repayment schedules—typically requiring repayment on your next payday (hence the name) ...
To complicate matters, this is the American definition of a debenture. In British usage, a debenture is a bond that is secured by company assets. In some countries, the terms are interchangeable. Key Takeaways A debenture is a form of unsecured debt (in American usage). ...
The debt avalanche and debt snowball methods are two different strategies for paying down debt. The debt payment strategy that's right for you depends on your personal circumstances and preferences. Weighing the pros and cons of each can help you create a plan to get you out of debt a...