If you are like most people in Louisiana, you have some type of credit or debt. This might be in the form of an auto loan, a student loan, a credit card or a home mortgage. You know that when you accept loans or credit, you have the obligation to repay any debt but you also know that there are situations which may arise that make that repayment difficult if not impossible. When this happens, it is important to assess your options and this includes having a good understanding of the two different types of debt.
As explained by The Motley Fool, the two types of debt you might have are called secured and unsecured. A secured debt is anything that is attached to some type of collateral that may be taken by a creditor in the event that you do not successfully repay the debt. Car loans are one type of secured debt. Unsecured debt is not associated with any type of collateral. Many credit cards are unsecured.
You might notice that the interest rate on unsecured credit is generally higher than for secured credit. This interest rate is one way a lender protects themselves but it can also be part of how your debt grows to an unmanageable level.
If you would like to learn more about the different types of debt and how to choose your best method of settling outstanding debts you cannot keep up on, please feel free to visit the consumer's credit assistance page of our Louisiana debt settlement and debt reduction website.