Debt

Debt is the amount of money borrowed by one party from another. The person who gives the funds is called the lender or creditor, while the one who borrows the money is called borrower or debtor. The lender agrees to lend funds to the borrower upon a promise by the borrower to pay it back, usually with an interest. An individual or a company acquires debt in order to use these funds as working capital to fulfill operating needs, take up fixed capital investments or for expansion of the business. Common forms of debts are term loans, bonds, commercial paper, mortgage-backed loans, credit card debt etc.