Any
money owed to an individual, company, or other organization. One acquires debt when one
borrows money. Generally speaking, one acquires debt for a specific purpose, such as
funding a college education or purchasing a house. In business and government, debt is often
issued in the form of
bonds, which are
tradeable securities entitling the bearer to
repayment at the appropriate time(s). Occasionally, especially for personal
loans, debt is issued without
interest or other
compensation; one simply pays back what was lent. This is exceedingly rare in business and a debtor almost always compensates a
creditor with a certain amount of interest, representing the
time value of money. However, some areas of
finance, especially
Islamic banking, do not allow debt with interest.