What You Need to know About DEBT
Debt is a financial obligation that one owes to another party, usually in the form of money. It can be a necessary means to achieve certain goals, such as purchasing a home or financing education, but it can also become a burden if not managed properly. In this article, we will explore what debt is, the types of debt, and the strategies to manage and reduce it.
What is Debt?
Debt is an amount of money borrowed from a lender or creditor with the promise to pay it back with interest within a specific timeframe.
There are two types of debt: secured and unsecured debt. Secured debt is backed by collateral, such as a house or a car, which the lender can seize in case of default. Unsecured debt, on the other hand, is not backed by collateral and is based on the borrower’s creditworthiness.