The types of debt are numerous. These include basic loans, syndicated loans, bonds, and promissory notes.



•Loan is an agreement where a principal sum of money is lent with an agreement that it would be repaid with in a certain time. The money lent can be by multiple parties/banks and so syndicate loans. The repayment can be either the entire amount at a given time or parts of the money at regular intervals.

•When a company or government wants to borrow money it goes to the public or other institutions and gets money. In return they issue a bond or a promissory note which entitles the holder of the bond repayment of the money and the interest. Bonds are usually considered as safe investment to general public.

•Credit cards work the same way as loans. It is just an automated process where you have a limit up to which you can borrow. Instead of borrowing at once you do so at multiple times when ever you pay through your credit card.

The ease of obtaining money and paying back later has created problems. Many forget the value of their purchasing power and spend more than the assets they possess. Biting off more than you can chew is not good and you realize this when you have taken many loans and you find out that your credit card payments and monthly bills are getting too much. Well instead of acting wisely you think that hiding or running away is going to benefit you. You default on payments and this leads to penalties and increased rates of interest. Instead of the burden decreasing you find it increasing.

Getting rid of debt once and for all is a commitment you need to take now and strive to ensure its success. Realistic options in debt management are

•Reorganizing your finance is what you need to do immediately.

•Credit counseling from a reputable organization in case you cannot do it your self

•Debt negotiation

•Debt consolidation or bankruptcy.

These options depend on the level of your debt, the level of your discipline and your prospects for the future.

Make a clear assessment of the money you earn and the money you spend. List all your sources of income and all your sources of payment (fixed like rent, mortgage, credit card payments etc. and variable expenses like food, entertainment, clothing etc.). Writing it down, helps in tracking your spending pattern, this helps you to prioritize your expenses. This is done so that you can identify the basics (housing, food, insurance, and education) and spend on them. Get a book to teach yourself or even a software program to develop and manage your finances. Create plans to save money and pay off your debt as soon as you can.

You can opt for debt consolidation loans when you fail in negotiations with your creditor or you have too many debts to keep a track of all of them. Consolidate your debt and obtain a loan that offers lower monthly payment over a longer period of time and pay off all you your debts. At least now you have the peace of mind knowing the amount to be paid every month is lower. Also check to see if the interest is lower. Credit cards carry an interest rate of 15 to 22 percent do not get a debt consolidation loan that offers you a higher rate of interest.

There are many types of debt management services, choose a non profit organization that offers debt management services. The debt management program that they offer may help you getting better debt consolidation loans and also help you in managing and paying of your debts.