The Difference Between Secured Debt and Unsecured Debt
The Difference Between Secured Debt and Unsecured Debt
Debt is not tied to any item or property. A creditor does not have the right to grab property to satisfy the debt if you default. The most common types of unsecured debts are credit cards, department store cards, medical bills, and personal (signature) loans.
A secured debt relies upon collateral.
Real property, personal property, fixtures, or a combination of both may secure repayment of debt. A debt that entitles the lender to confiscate a specified piece of property (the collateral) if the debtor cannot repay the secured debt. The most common forms of secured debt are home loans (mortgage or equity line-of-credit) and car loans.
The last kind of a "secured" debt is a student loan.
Student loans are loans offered to students to assist in payment of the costs of professional education. These loans usually charge lower interest rates then other loans, and are usually issued by the government.
The Difference Between Secured Debt and Unsecured Debt - To learn more about this author, visit Eric Pinola's Website.
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Unsecured debt relies only upon your promise to repay the debt.
Debt is not tied to any item or property. A creditor does not have the right to grab property to satisfy the debt if you default. The most common types of unsecured debts are credit cards, department store cards, medical bills, and personal (signature) loans.
A secured debt relies upon collateral.
Real property, personal property, fixtures, or a combination of both may secure repayment of debt. A debt that entitles the lender to confiscate a specified piece of property (the collateral) if the debtor cannot repay the secured debt. The most common forms of secured debt are home loans (mortgage or equity line-of-credit) and car loans.
The last kind of a "secured" debt is a student loan.
Student loans are loans offered to students to assist in payment of the costs of professional education. These loans usually charge lower interest rates then other loans, and are usually issued by the government.
The Difference Between Secured Debt and Unsecured Debt - To learn more about this author, visit Eric Pinola's Website.
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I appreciate the explaination in layman terms. And to the point answer.
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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