What types of debts are there?
Having a life free of debt is almost impossible in this era. And is that acquiring financial commitments is not "bad", credit is an alternative to acquire a good that we could hardly pay cash. The real mistake is to do it without planning or comparing and, even worse, without knowing basic financial concepts.
This time I will talk about the types of debts that exist and I will give the possible answer to that question that we all have asked ourselves some day: how am I going to pay my debts? Ready?
Well, the debts are divided into two groups:
They are also known as "secured" or secured debts and are those where the property or property can be used as a form of payment in case of delay. That is to say, the properties that you acquired guarantee the creditor the payment of the existing debt and he can recover them if you do not comply with the provisions of the contract.
Among the most common secured debts include:
Failure to meet the monthly payments agreed with the bank that granted the loan, the creditor can execute a guarantee through a court procedure, this is done with properties such as houses, apartments, land, buildings or farms.
According to the National Association for the Defense of the Debtor, there are three levels of mortgage indebtedness: the least severe level is when the client still pays but every time it costs more to do it; The next stage is when you have a 90 day delay without paying, but it is still possible to recover; while a serious level is when you can only give housing in dation.
Financing of furniture for the home or offices.
Surely it comes to your mind some store or furniture that sells on credit or small payments, right? In most cases they offer financing on the condition that the debt is guaranteed. So from now on, it will be best to comply with the established fees and, no matter how small the monthly payment, be consistent with the installments if you do not want one day to empty your house due to non-payment.
The financing is granted by a bank, a car agency or a specialized corporation (sofoles). Normally, to access this credit you must pay a down payment, which is on average 20% of the total value of the vehicle, and the rest is paid in monthly payments for a period determined by the amount of the down payment. However, if you stop paying the monthly payments, even if the term is close to completion, the guarantor can take possession of the property with or without order of a court.
Contrary to the previous scenario, this type of doubt does not have an endorsement. That is to say that, of not paying or canceling, the creditor will not be able to seize any property. However, the debtor can be penalized and legal action can be taken against him, but he can not be deprived of his assets.
Consumer loans are an example of this type of debt. For example:
Bank or departmental credit cards.
These products have pros and cons.
Advantages: They allow us to use the products and services, while we are still paying for them without having to wait until we have saved enough money for the purchase. In addition, if they are used wisely, we build a favorable credit history and take advantage of other financing opportunities with better conditions in the future.
Disadvantages: Using this type of financing reduces the ability to save money and if situations of financial emergency arise, we may be unprotected.
In addition, the final price of the item obtained through financing rises considerably, interest rates can be high and charges and commissions, such as account management, annuity, insurance, can prolong payments until they fall into a non-payment situation.
A personal loan is a contract whereby the financial institution advances an amount of money (principal) to another person called a borrower, with the obligation to return the principal and also pay agreed interest and expenses derived from the operation.
Remember that before acquiring a credit of any kind it is important to have an emergency fund of at least three months to be able to make the corresponding payment in case of becoming unemployed. However, all is not lost when there is already a problem of over-indebtedness.