Did you know that large businesses could raise funding in ways other than availing a loan? Many large companies issue bonds or debentures to the general public to raise money and repay the same in the form of interest. In this way, the ones who purchase the bond can earn interest regularly.
Another meaning associated with the term ‘debt’ is when it refers to the amount of money that is owed by a borrower to a lender. These could be credit card debts, mortgages, loans etc. This debt can also be classified into good and bad debt where in good debt is money owed for things that can help increase one’s wealth over time and a bad debt is when money is owed for items that do not help increase one’s wealth.
For the purpose of this article, we will refer to the first meaning of debt.
