The person who lends you the money or it's eqivalent is call the creditor. You, who receive the loan, is called the debtor.
The creditor is anyone to whom a debt obligation exists.
Different kinds of creditors are treated differently. You need to understand what type of debts you have.
Types of loans given by creditors
Secure loans are loans you borrow money or buy a certain item and give the creditor a security interest or collateral in an item.
An example of a secure loan is a car loan or a mortgage. Your car or your house is given as collateral, the creditor has a security interest in that car or house. if you don't pay your debt to the creditor he will take back that car or house from you.
Unsecured loans occurs when a creditor lends you money and does not have a security interest in anything you own.
Tip for dealing with creditors when you are short on cash
When money becomes an issue and you do not have money to pay all your creditors, start at the top of your priority list and list how much you have to pay the creditor to keep yourself out of immediate financial problems.
You can successfully turn even current bad debts into a positive credit rating.
Your goal is to approach these creditors and negotiate repayment plans that sincerely demonstrate your ability to make regular payments on time, pay off the debts you owe, and revive their interest in you as a customer.
Remember you will always obtain a better outcome when you negotiate directly with a creditor rather than with a collection agency.
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