Consumer debt has a variety of forms. It can be defined as debt accumulated due to personal consumption, or debt accumulated due to family and other household matters. If too much consumer debt accumulates, paying it off can become a problem that often leads to falling further into consumer debt.
Credit Cards
One form of consumer debt is credit card debt. Using credit cards to make purchases of food, clothing and other consumer goods, and then not paying off the full balance at the end of the month, can quickly add up to a substantial credit card debt.
Automobile Loans
Another form of consumer debt is automobile loans. This is a consumer loan that uses the purchased automobile as collateral for the loan.
Mortgages
There are also consumer finance loans, such as home mortgages, that are considered consumer debt. The home is used as collateral or security for the loan.
HELOC
A home equity line of credit (HELOC) can be used for home improvements, consolidation of debts, tuition, paying taxes or purchasing an automobile. This is another form of consumer debt.
Equity Loan
Home equity loans are also used for a variety of things. They are also secured by the home, and are considered to be consumer debt.
Warning
If you accumulate too much consumer debt, you may need to look into some type of debt management program or speak to a credit counselor.
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