What is debt?Say the word ‘debt’ and you’ll likely feel negative or uncomfortable about the topic.
Debt is most commonly associated with late repayments, having no money and getting into financial trouble.
So, what exactly is debt?
Debt refers to a situation where you owe money to a lender, and are making repayments or repayment is due.
There is a difference between ‘good’ debt and ‘bad’ debt, however – something we’ve explored in detail on our blog – but being careful with your borrowing means that you will usually have a relatively positive experience when taking on credit or finance.
After all, your mortgage is a form of debt but it means that you will one day own your property when all of the repayments are made. Student loans are debt – admittedly one that we rarely think about – but many people in the UK owe tens of thousands of pounds for the degree they now have.
It’s very rare that as adults we don’t owe some sort of credit. Even having an overdraft on a regular current account and using it, technically means you are in debt until it is paid off at the end of the month.
Being in debt can, of course, lead to problems later down the line, if you are unable to manage your repayments or make them at all. However, only certain individuals appear to be described as ‘in debt’.
When someone says that they are ‘in debt’ this may mean that they are finding it difficult to keep up with repayments or finding the amount they now owe unmanageable.
We understand that any type of debt can be a worry and while it is a part of everyday life if your circumstances change or you are dealing with high amounts of credit, you need to have a plan in place to ensure it never gets on top if you.
Speak to one of our team today if you are struggling with any debts that you owe, to find an effective solution.