What is a Debt?

Although this concept is one of the most mentioned in any economic news, the truth is that we will try to give a more accurate view of this important term.

Debt is the obligation contracted by someone who asks for something

Debt is the obligation contracted by someone who asks for something

Be it a natural or legal person or even a country in which a series of conditions that must be met are previously established. It is very important to know this term so common in our day to day because it is the tool that allows in any economy to accelerate or decelerate the rhythms of growth.

Therefore, there is always a debtor who is the one who asks for the money borrowed and a creditor who is responsible for lending or delivering that amount. Now, although the most common is talking about money, they can also be tangible or intangible assets.

The debt should not be confused precisely with the amount to be repaid since we must distinguish more specifically between the debt and the amount owed. The most common is to find a personal loan in which there is a debtor requesting a certain amount of money to buy a car for example and a creditor that this case would be the bank with a capital that would be the amount of the loan subject to a plate and a certain interest rate that are the conditions of said loan. In this case, the amount due would be the requested capital plus the corresponding interest previously agreed.

As we have been saying, it is a very relevant concept because it allows us to obtain something immediately and pay it over time and meet the conditions established between both parties. To contract a debt means to pay expenses or investments in exchange for paying an amount greater than the amount received.

It is a very valuable instrument for the economic sector because with it you can face actions without having the necessary amount to do so and therefore allows the economy to move and be more active.

 

Basic problem to be encounter of a contracting debt

contracting debt

The basic problem that we encounter when contracting a debt is precisely what has happened years ago with the crisis that we have experienced in our country and it is to overcome the indebtedness capacity of each one since we will not have enough income to be able to fulfill the established agreement. For this reason it is necessary to study very well before the current capacities and resources such as those foreseen in the future before in order to be sure that the amount borrowed together with the interest can be repaid within the estimated timeframe.

At Petrus family we are specialists in the financial sector, so we always offer you the opportunity to choose the financial products that best suit your needs without exceeding your own borrowing capacity.


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