It is a financial liability that one party owes to another. It is a result of borrowing money, goods, or services with the agreement to repay the amount borrowed, usually with interest, over a specified period of time. Debt can arise from various sources, such as loans, credit card usage, mortgages, or outstanding bills.
The word “debt” comes from the Old French term “det,” which originated from the Latin word “debitum,” meaning “something owed” or “to owe.” The Latin term is derived from the verb “debere,” which means “to owe” or “to be indebted.”
- Financial obligation
Sarah borrowed a significant amount of money from the bank to start her business, and now she has a considerable debt to repay. She has monthly installments to pay off the loan, including the principal amount and the accrued interest. Sarah is managing her finances diligently to ensure timely debt repayment and avoid any negative impact on her credit score.
FAQs(Frequently Asked Questions)
What is debt as a noun?
As a noun, it refers to the financial liability or obligation that one party owes to another. It represents the amount of money, goods, or services that are owed and must be repaid.
What is an example of a debt?
An example of a debt could be a student loan. Let’s say Sarah borrows $30,000 from a bank to fund her college education. The $30,000 represents her debt, and she has an obligation to repay that amount to the bank over time, usually with interest.
What type of word is debt?
The word “debt” is a noun.
What are 5 examples of debt?
Here are five examples of common types of debt:
Credit Card Debt
This refers to the outstanding balance that one owes on their credit card, typically accrued from making purchases or cash advances.
Student Loan Debt
This is the amount borrowed to finance higher education expenses, such as tuition, books, and living costs, which needs to be repaid after graduation or leaving school.
This represents the outstanding balance on a home loan that is taken to purchase a property. It is repaid through regular mortgage payments over a specified period of time.
Auto Loan Debt
When purchasing a vehicle through financing, an auto loan is obtained, and the remaining balance represents the debt owed until the loan is fully repaid.
Personal Loan Debt
This can be any type of loan taken for personal purposes, such as debt consolidation, home improvement, or emergency expenses. The borrowed amount is repaid in installments according to the loan terms.
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