LetsLearnFinance

DEBT---------- Views & Ideas

Debt is invariably a financial term frequently used and is created when a Creditor agrees with a Debtor to lend some money/ assets for some fixed tenure with an expected repayment and is usually borne with Interest attached with it. In Other terms we may say that debt refers to consuming or using future purchasing power in present. Standard of Deferred Repayment denotes the process and agreement on basis of which repayment shall be done having consent of both the parties.

There can be various Types of Debt depending upon the nature and characteristics:-

1) Secured

2) Unsecured

3) Private

4) Public

5) Syndicated

6) Bilateral

Apart from these there are some debts that have mixed features of the above mentioned.

Debt is often sought after and required for business purpose, investment strategies, purchasing goods and services at present with debt having used future purchasing power. However Debt has a long term effect on any country. Over volume debt has long term effect on National output and economic growth, infact there remains an impact with inflation as well as deflationary situation of a country.

Thanks

Pamela