Debentures pay higher rates than secured debts, but there is a risk that an issuer will be unable to pay the investor, according to TheFreeDictionary. Debentures are typically issued by companies with good standing, but these bonds are unsecured and have no collateral.
TheFreeDictionary further notes that government debentures in particular are risk-free. For instance, governments can print more money or raise taxes if there is trouble repaying the debts. Subordinated debentures are bonds that fall below any debts incurred by a company. If a company is liquidated, all debts must be settled before payment is issued to the investor; however, these types of bonds carry even higher interest rates. Converted debenture is another type of bond that can be converted into stock, according to Investopedia.
TheFreeDictionary adds that a major drawback is the fact that the investor then becomes a creditor until the debt is paid in full. Moneycontrol notes that an issuer may not pay the bond on time. Debentures rely solely on the reputation and credit rating of that particular company and are detailed in a contract where it is specified that the issuer promises to pay the interest and principal on time. Investopedia mentions another disadvantage with regards to convertible bonds since the issuer pays a lower interest rate if there is a convertible option on the bond.Learn More
A credit score of 597 is typically considered subprime or fair, according to Credit.org from Springboard. Within the subprime score range of 550 to 620, approximately 50 percent of borrower accounts become delinquent. Borrowers with a score of 597 may have trouble getting loans, and any credit they are approved for may come with fees and high interest rates.Full Answer >
When a borrower misses a payday loan payment, the lender can charge a fee for the missed payment and make an attempt to collect the debt. The lender may cash the check it has on file, which could trigger the check to bounce at the debtor's bank, states Washington Law Help. Payday lenders may decide to send a defaulted account to a collections agency.Full Answer >
A consumer can sell a car if they still owe money on it, but the balance must be paid in full to release any liens against the title. That's why car owners always want to sell a car for at least as much as the balance of the loan.Full Answer >
Apply for an Old Navy credit card by visiting a retail store or filling out an online credit application. Be prepared to supply your personal contact information, monthly income and residence details. As of 2014, applications are approved and issued by Synchrony Bank.Full Answer >