New Jersey ranks among the top five states with the highest-earning households in the nation. On the other hand, New Jersey’s unemployment rate is behind the national average. Additionally, New Jersey is among the top ten most expensive states to live in because of the high cost of living. As a result, many locals have borrowed money to maintain a high living level.
People’s Debt in New Jersey
People in New Jersey who are in debt may experience different approaches when it comes to collections. Depending on the debt classification, such as where it came from and how much it is. You may receive repeated phone calls. The most common debts in New Jersey are:
- Credit Cards or Revolving Debt
- Mortgages or Secured Debt
- Student Loans or Unsecured Debt
Let us understand these types of debts in today’s blog.
Credit Cards or Revolving Debt
A credit card is an excellent option to help you finance your needs. An available credit account lets you charge money as long as the account is in good standing. In addition, if you qualify for a revolving credit line, the card company will set a credit limit for you.
The amount of revolving credit you have changes each month based on how much you use it. Even the amount of the minimum payment may also change every month. Remember, unpaid balances carried forward to the next billing cycle will be subject to interest charges. So when you get a bill, it is best to pay it in full.
Mortgages or Secured Debt
New Jersey’s primary source of debt is homeownership. However, it is widespread in other countries. Secured debts are loans with security. A borrower can use money or property as collateral. Remember that if the borrower fails to make a payment, the lender will take the collateral. However, if you do not repay a secured loan, it may cause other cases. Secured debt includes mortgages and auto loans. Home or automobile purchases typically secure these loans.
Student Loans or Unsecured Debt
There is no need for collateral when a debt is unsecured. And it is common for student loans. Yet, your credit will significantly impact whether you qualify for student loans or unsecured debt without collateral. Student loans are the second-largest kind of debt after mortgages in New Jersey. Of course, it might be difficult for fresh graduates to land positions with wages that would meet their expenses.
The federal government does provide several repayment assistance programs. However, most increase the repayment time to 25 or 30 years. Additionally, even if the loan is “unsecured” or non-collateral, it does not mean that late payments are always acceptable. Falling behind might still affect your credit leading to collections or legal action.
Final Say
It is essential to understand the pros and cons of availing of various loans or credit is essential. While the state’s median household income is above the national average, the state’s high cost of living often contributes to the same free-borrowing behavior prevalent elsewhere in the United States.
If making payments becomes too much of a strain, borrowers have several alternatives for dealing with their debt. When faced with heavy debt, it\’s crucial to weigh your choices. Come in for a no-cost consultation with us so we can help you figure out your next steps.