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Whether secured debt is recourse or nonrecourse can have significant consequences if the debt is settled in foreclosure of the secured property. [12] Generally, while the net gain or loss is the same regardless of the classification of the debt (it will always be the difference between the basis of the burdened property and the amount of the ...
Personal loans’ tax deductions depend on how you use the money. You cannot deduct payments from your annual income for tax purposes when personal loans are used for personal needs, such as: Debt ...
Recourse debt or recourse loan is a debt that is backed by both collateral from the debtor, and by personal liability of the debtor. [2] This type of debt allows the lender to collect from the debtor and the debtor's assets in the case of default, in addition to foreclosing on a particular property or asset as with a home loan or auto loan.
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral, and if the borrower defaults, the creditor takes possession of the asset used as collateral and may ...
Unlike specific kinds of loans — like auto loans tied to cars — you can use share-secured loans for a variety of purposes. The general rule of thumb is that you should only use them to pay for ...
Cons. Risk of losing collateral. A lender can seize the collateral used to secure the loan if you default. Potential lack of flexibility. Some secured loans can only be used for its intended purpose.
These applications are denied, and the customer's anticipated refund is used to pay off the debt, plus a fee". [17] Tax prep firms often vaguely refer to this practice merely as "previous debt". This risk exists even if the client is only using the RAC account for purposes of taking the tax preparation fees out of the refund. [3]
Personal loans, credit cards, student loans and medical loans are some forms of unsecured debt. Secured and unsecured debts have many similarities, but one major difference is whether collateral ...