Debt is apparently a single word term that can be used to describe the money borrowed. It can become a real liability for a long time. The term is too broad in the financial world. It covers a wide range of categories. Those dealing with the debt repayment or the debt recollection of EC Credit Control are actually concerned with the type of the debt before they actually give a perfect decision. The various categories that fall under the term debt and are enlisted as the various types of debt are as follows:
- Credit cards are the most common type of the debts in modern times. As the users buy the essentials using the credit cards he is actually getting the loan. This has to be repaid when the time of one month comes to an end. The longer you take to repay the more interest you will have to pay along with the original payment. These cards come with a certain annual percentage rates and annual fees. In order to save from the additional costs it is essential for the credit card holders to understand all these terms.
- Mortgage is a kind of legal contracts that includes a property of any kind. It is of two sub categories. Either it is the adjustable rate mortgage in which the interest rate keeps increasing with the passage of time or it is the fixed rate mortgage in which there is no change in the interest rate in the designated loan duration.
- For those who want to purchase the dream vehicle or the vehicle for their business the most essential assistance in the current times comes in the shape of auto loan. These loans can be returned both in one whole and in parts through installments. It won’t be wrong to classify them as the installment loans.
- Considering the high cost of the higher education many institutions and countries have introduced student loans. These loans have become a common type of debt these days. These loans can be need based too. These loans can come from the government as well as from the private institutions. The term and conditions may vary.
- Consolidated loans are another type of debt. It is a combo of more than two loans. Despite having multiple loans the consumer pays only single rate on monthly basis. They are very helpful in devising the debt strategy.
- The renowned departmental stores offer retail cards. They usually mean an annual fee. If the payments are not done in a required time the financial burden can be a problem.
These are some of the various forms of debt that have become really popular. If they are attended to in a vigilant way they cannot be problematic