March 2011

What is Debt?

Post Thumbnail of What is Debt?
 All,Debt Tips         8 comments

What is Debt ?
We all hear a lot about debt whether it’s from debt consolidation companies, our banks or our friends and relatives who perhaps are struggling with it themselves. It seems everyone these days has debt whether it’s your average Joe, large corporations or even countries… but what is debt? And what does it mean?
Essentially the easiest way to answer the question ‘what is debt’ is to describe it as an amount that an individual or organisation owes to a lender. When we are in someone’s debt it means that they have done something for us and we need to repay them, and we often use this in a colloquial manner when someone does us a favour. However in finance that debt refers to money, and we will usually owe this to an organisation such as a bank or a mortgage company. In this situation that loan will normally come with interest and that will mean that the debt grows over time and this is how the loan companies make their money. To those businesses we are an investment in much the same way you might put your money into stocks and shares, a property, or a savings …

 Page 3 of 3 « 1  2  3