Understanding your debt

Understanding Your Debt

November 20, 2020 5:47 am Published by

Understanding Your Debt

Being in debt can be a very confusing, draining and frustrating position to be in, hence the severity of it. In the UK, levels of debt per household are high and are currently rising. According to ‘The Money Charity‘, the average debt total per UK household during August this year was £60,526, along with £3,946 unsecured debt per UK adult. The statistics will have marginally differed from August to now but will still hold a similar value/total. If you are somebody who has a sum of debt to their name but does not quite understand debt as a whole, we can help to get you understanding your debt in no time.

What is debt?

Debt is a sum of money borrowed by a person from another which is meant to be repaid. Debt can be any amount you want from something very low to very high. The amount borrowed is typically repaid over the course provided by the lender.

Common ways to find yourself in debt

Different people have different money habits, this means that some people are more likely to slip up and find themselves in debt than others. But, it does not always work like this. Some of the most common reasons include:

  1. Poor money management
  2. Little savings
  3. Unemployment
  4. Unexpected bills and payments

Different types of debt

There are multiple different types of debt in the UK, depending on who you borrow from and why you are borrowing will lead to a different type of debt. So, which are the main types? Listed below are three types of debts which tend to be the most common as they are typically the most used by the general public:

  1. Unsecured Debt
  2. Mortgages
  3. Credit card debts

Managing your debt

Finding yourself in debt without knowing how you can possibly get out is something which can bring even more stress to your mind. But, thankfully, there are plenty of different ways you can work to manage your debt whilst working your way out of it. Understanding your debt is one of the most important places to begin on your journey, as mentioned before. So, after identifying the basics including where your debt came from and what type of debt it is, you can then work out what happens next. One of the most common ways you can start to manage your debt is through using a budget. This budget will allow you to work your way out slowly but surely. If the budget works for you and gives you everything you need, you will be on the right tracks of clearing your debt.

If you feel as though your debt should be looked at, here at Debt Support Online we can help. We offer different services to protect you and your customer credit rights. Therefore, if you know something is incorrect why not get in touch!

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This post was written by Charlotte K

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