Wednesday, March 28, 2012

Corporate and Finance news and Tips ? Understanding Credit and ...

March 27th, 2012

Posted by : admin

Debts are of two types that is secured and unsecured. Secured debts are those which are attached to some asset like car for car loan and house for house loan. In this case the lender can sell the asset to procure the loan. However, the unsecured debts include credit cards, medical bills and signature loan. These loans are not attached to any asset and hence difficult to procure.

There are some warning signs to tell that the debt is going out of hand and need to be managed. These are when you are only able to pay the minimum payments for your loan or any other debt, you resort to buying new credit cards to pay of the bills of old card, thus you keep rotating but do not retire. It?s a great warning sign if you have reached the limit of your credit and account and at the same time listed as having bad credit history. Always follow 20/10 rule which says never take loan greater than 20% and monthly payment more than 10% of your income.

Source: http://www.corporate2.com/understanding-credit-and-debt/

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