Personal Finance

Q&A: What is a liability?

A liability is a debt that a person or organization owes to another person or organization.

Real-life application: Some common types of liabilities are credit cards, auto loans, student loans, and mortgages.

Pro Tip: Knowing each of your liabilities is important for having a sound financial plan. You should know how much you owe, who you owe it to, what the minimum monthly payment is, and what interest is being charged.

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