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Unsecured Debts
Debt We Can Settle
  • Credit Cards
  • Department Store Cards
  • Medical Bills
  • Collections or Repossessions
  • Business Debts
  • IRS Debt or Back Taxes
  • Personal Loans
Secured Debts
Debt We Can't Settle
  • Mortgages
  • Auto Loans
  • Government Loans
  • Student Loans
  • Car Loans
  • Home Loans
  • Other Secured Debts

Secured and Unsecured Debt: Is There a Big Difference?

There is a huge difference in secured debts and unsecured debts. It is imperative for you to understand how these two types of debt differ from each other, and what debt relief procedures need to be taken for each. If you are currently dealing with financial setbacks, it is extremely important for you to know the steps to become debt free for both secured and unsecured debts.

Secured Debts

Secured Debt is the result of the inability to pay bills that relate to an asset; this asset is used as collateral. For example, debt from a mortgage or car loan would qualify as secured debt, because the lender can just repossess the property if you fail to pay.

Secured Debt Loan Lenders

Furthermore, due to the fact that lenders have the power to take the asset if the bills are not paid, secured debt usually has a relatively low interest rate.The bank or lender knows that if they give you a loan, they will not lose a lot of money because they can just take back the property if you do not …

Unsecured Debt to Secured Debt

While credit card debt is usually a type of unsecured debt, there are instances when it can be considered secured debt.  When people need to rebuild their credit, they sometimes use a secured credit card to do so.  This works by the person putting a certain amount of cash on the card, and the amount they put up serves as …

Prioritize Your Debts

Many people have both secured and unsecured debts they need to pay, however, the secured debts should most definitely be paid first.  Lenders have the power to just take back the property associated with your secured loan; therefore, although it is extremely important for you to repay your current unsecured debts, secured debts should be the priority.

Unsecured Debt

Unsecured debt is very different from secured debt.  With this type of debt, you agree to pay back the loan with no actual assets on the line that can be used as collateral.  There are a few different kinds of unsecured debt, however credit cards and personal loans are the most widespread types.

Unsecured Debts Chancy for Lenders

Unsecured loans are definitely risky for the lenders because if you fail to pay back your debt, they may have a hard time getting the money that is owed to them.  This also explains why unsecured loans have higher interest rates than secured loans.  As aforementioned, it is imperative to pay down secured debt first, however it is also vey …

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