A debt is something that is owed to another. A person or company owing debt is called a debtor. An entity to whom debt is owed is called a creditor. Debt is used to borrow purchasing power from the future.
There are numerous types of debt obligations. They include credit cards, loans, bonds, mortgages and promissory notes.
It is common for borrowers to obtain large sums of money for major purchases, such as a mortgage, and pay it back with an agreed premium interest rate over time, or all at once at a later date (balloon payment).
The amount of money outstanding is usually called a debt. The debt will increase through time if it is not repaid faster than it grows.
In some systems of economics this effect is termed usury, in others, the term “usury” refers only to an excessive rate of interest, in excess of a reasonable profit for the risk accepted.
