What is debt repayment?

Debt repayment is simply the process of paying off your principal debt balance on a loan over a period of time. Despite a fairly sensible basic meaning, understanding how to use debt wisely and repay your debt effectively are keys to good money management. This includes an understanding of basic terms surrounding the debt repayment process.

What are the payment terms of debt?

The payment terms of debt can be helpful when interest rates are low and payments are simple. Still, some types of debt have much higher rates and far more complex repayment schedules that can trap borrowers in a seemingly inescapable pattern of repaying their debts only to have to borrow again for necessities.

Can I make a debt repayment plan on my own?

Credit card debt: This is the one type of debt where you can make a debt repayment plan on your own; we tell you how below. There is also an assisted plan called a debt management program; you go through a credit counseling agency for that.

What are all payments on a loan called?

In either case, all payments on the loan are called repayments. Why Does Repayment Matter? For both a borrower and a lender, the breakdown of repayments into principal and interest are very important.