Debt Definition: What Does ‘Debt’ Mean?

Debt is money owed by one party (the debtor) to another party (the creditor). Typically, the borrower repays the debt amount, including interest, within a time frame per the terms of the contractual agreement.

What Is Interest

Interest is a fee that is charged by a creditor to the debtor and is calculated as a percentage of the principal sum.

A bank, business, or an individual can issue debts to a debtor.

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