A debt is something, usually money, that has to be paid back to someone or an organisation that loaned it to you in the first place, normally with some additional cost. Anyone who uses an overdraft on their bank account, has a mortgage or who owes their mate £20 has debt. That’s nearly all of us, right?
It is almost impossible to live debt-free and most of us can’t afford to pay cash for our homes or even our cars. If you want your own home or need a car to get you to work every day, you will need to borrow money. While a mortgage will hopefully make you money in the long-term, a car loan probably won’t because most cars lose value over time.
The basic rule is, make sure you have a plan for the repayments and that you can afford them. Use the ‘Understanding your money’ tool (right) to see what money you have coming in, going out and how much is left at the end (or not). Once you have your results, follow the link to for what to do next or use the buttons below.
Ben - Motor and Allied Trades Benevolent Fund. Lynwood Court, Lynwood Village, Rise Road, Ascot, SL5 0FG. A charity registered in England and Wales (no.297877) and Scotland (no.SC039842). A company limited by guarantee, registered in England and Wales (no.02163894). Registered with the Homes and Communities Agency (no. LH 3766).