Debt
GeneralMoney you owe to someone else, whether a bank, credit card company, family member, or other lender. Not all debt is harmful — a mortgage or student loan can build toward something — but high-interest debt like credit cards can trap you.
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Secured debt
A loan backed by collateral — something the lender can take if you do not repay. Mortgages and car loans are common examples. Secured loans typically have lower interest rates because the lender has less risk.
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Unsecured debt
Debt not backed by any collateral. Credit cards, personal lines of credit, and payday loans are unsecured. Because the lender cannot seize a specific asset, these loans usually carry higher interest rates.
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Default
Failing to repay a debt according to the agreed terms. Defaulting damages your credit score, may trigger collection calls, and can lead to legal action. On-reserve, Section 89 provides some protection against seizure of property.
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Interest rate
The percentage a lender charges you to borrow money, or the percentage a bank pays you for keeping money in a savings account. Lower rates are better for borrowing; higher rates are better for saving.