What Is The Difference Between Loan And Debt?

6 Answers

Anonymous Profile
Anonymous answered
You only have to pay back principal if you have debt,

Whereas, you have to pay both principal and interest if you've got a loan.
Adnan Manzoor Profile
Adnan Manzoor answered
There are different ways through which an organization raises its funds to meet its short term and long term funding requirements.
These requirements can be fulfilled in various ways like issuing bonds, raising loans, issuing short term papers, etc.

Bonds are usually issued to meet the long term financing needs. Their characteristics are different from other finances due to the fact that they are issued and managed by a third party called a trustee who acts on the behalf of the issuer of the bonds.

The issuer of the bonds pays regular interest payments on those bonds and most probably these bonds are paid off at the expiry of those bonds.

Apart from that the question of having a difference between the loan or a debt is that the loan is a part of the debt. When a company's balance sheet is published, on the liability side of its balance sheet a complete set of liabilities is given. If we consider loan and debt, crudely there exists a very subtle difference between them. Analysts consider the issuance of bonds if any by the organization as the debt of that organization. All other borrowings made through banks are called loans. So the basic difference is that bonds issued are considered as debt and loans as liabilities.
Mike Hatcher Profile
Mike Hatcher , Owner of Mcguire Financial Group, answered

The amount of money borrowed from some private company or bank is carried as loan and the money raised by issuing bonds to the public is known as debt.

Laura Schmid Profile
Laura Schmid answered

Loan is the act of lending or borrowing money when your financial resources are quite in a brink. That's when a moneylender comes in. While when it comes to debt, it may appear as the same but this is typical something that owed or due.

Mike Davis Profile
Mike Davis answered
A loan becomes a debt when it remains unpaid beyond the due date, depending on the terms of the loan agreement. On the other hand, a debt may arise out of a number of sources e.g. Loan, credit card etc.

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