First off, good on you for that Google search. Debt research probably isn\u2019t the light reading you\u2019d like to be doing. But it\u2019s important. And we\u2019re going to make it as easy as possible for you to tackle.<\/p>\n\n\n\n
So, let\u2019s break it all down. From the three main categories of debt, to which types might cost you more in the long run.<\/p>\n\n\n\n
All debt generally falls into one of three categories:<\/p>\n\n\n\n
Secured debt<\/strong>: debt that\u2019s tied to an asset, like your home or car. If you don\u2019t keep up with repayments, the lender can take the asset back. Unsecured debt<\/strong>: debt that isn\u2019t tied to anything you own. The lender can\u2019t take an asset from you (let\u2019s say, your house) if you fail to make payments. Instead, lenders rely on your credit history to decide if you qualify. Think credit cards and personal loans. Revolving debt<\/strong>: this means you can borrow up to a certain limit, repay it, then borrow again. Most credit cards also fall into this category. Ah, already familiar? 64% of adults in the UK are. Credit card debt is one of the most flexible types of unsecured debt. You can spend up to your limit and pay off as much or as little as you like each month \u2013 though you\u2019ll be charged interest on any small repayments if you don\u2019t pay your full balance.<\/p>\n\n\n\n While it offers flexibility, interest can build quickly. That\u2019s where Zilch comes in. With huge perks like no interest* when you Pay over 6 weeks, and up to 5% back in Zilch Rewards when you Pay now, Zilch can help reduce the overall cost of borrowing. Have a think about it.<\/p>\n\n\n\n *Fees may apply.<\/p>\n\n\n\n These are usually fixed-term, unsecured loans. You borrow a set amount and repay it over an agreed time. Rates can vary depending on your credit score, and missing payments can affect your financial status.<\/p>\n\n\n\n Student debt tends to be lower-cost, with repayments linked to your income. While interest still builds, the terms are often more forgiving than other types of debt. And you won\u2019t start repaying until you\u2019re earning above a certain threshold.<\/p>\n\n\n\n A debt with a big home-shaped silver lining. A mortgage is a type of secured debt. You borrow money to buy a home and repay it over time. If you miss payments however, the lender can repossess your property. It\u2019s often considered \u2018good debt\u2019 because it helps you build equity, but it still carries risk.<\/p>\n\n\n\n Also a form of secured debt. Whether it\u2019s a hire purchase or personal contract purchase (PCP), the car is used as collateral. That means you risk losing the car if you fall behind on payments.<\/p>\n\n\n\n Not all credit is created equal. Some buy now, pay later options come with unclear fees and harsh penalties. Not with Zilch though, we threw the classic buy now, pay later model out. Our Pay over 6 weeks<\/a> product is designed to help you stay in control. It\u2019s interest-free (fees may apply), and has clear due dates and reminders. And if you do opt to Pay now<\/a>, you can earn up to 5% back in Zilch Rewards<\/a>. More control and fewer costs? It\u2019s a win-win.<\/p>\n\n\n\n It depends on your approach, but if we\u2019re talking biggest financial win, high-interest debt should be paid off first. Think credit card balances and payday loans. These cost you more over time, especially if left unpaid. Tackling them early helps you save money and avoid falling into a debt spiral.<\/p>\n\n\n\n Secured debts like mortgages or car loans should always be prioritised too. Missing payments could mean losing your home or vehicle.<\/p>\n\n\n\n Download Zilch today and start paying smarter. Whether you Pay now or over time, it\u2019s built to help you make the most of your money.<\/p>\n","protected":false},"excerpt":{"rendered":" First off, good on you for that Google search. Debt research probably isn\u2019t the light reading you\u2019d like to be doing. But it\u2019s important. And we\u2019re going to make it as easy as possible for you to tackle. So, let\u2019s break it all down. From the three main categories of debt, to which types might […]<\/p>\n","protected":false},"author":18,"featured_media":16830,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-16829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/posts\/16829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/comments?post=16829"}],"version-history":[{"count":0,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/posts\/16829\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/media\/16830"}],"wp:attachment":[{"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/media?parent=16829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/categories?post=16829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zilch.com\/uk\/wp-json\/wp\/v2\/tags?post=16829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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<\/p>\n\n\n\nTypes of consumer debt<\/strong><\/h2>\n\n\n\n
Let\u2019s get familiar.<\/h4>\n\n\n\n
Credit card debt<\/strong><\/h4>\n\n\n\n
Personal loans<\/strong><\/h4>\n\n\n\n
Student loans<\/strong><\/h4>\n\n\n\n
Mortgages<\/strong><\/h4>\n\n\n\n
Car finance<\/strong><\/h4>\n\n\n\n
Buy now, pay later and split payments<\/strong><\/h4>\n\n\n\n
What types of debt should be paid off first?<\/strong><\/h2>\n\n\n\n
Looking to cut the cost of borrowing?<\/strong><\/strong><\/h2>\n\n\n\n