Friends many a times I have often came across two words - debt and loan. Can anybody clear my idea regarding the difference between these two words? I want explanation related with accountancy or economics point of view.
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Loan is a type of debt. Whatever you owe to others is debt. Thus the goods bought on credit also constitute debt.. Loan is an agreed amount called Principal that is to be returned at a future date and interest also paid as agreed.
http://en.wikipedia.org/wiki/Loan
G. K. Ajmani Tax consultant http://gkajmani-mystraythoughts.blogspot.com/
Friends many a times I have often came across two words - debt and loan. Can anybody clear my idea regarding the difference between these two words? I want explanation related with accountancy or economics point of view.
In my opinion both are same. But there is some difference between them that is debt means every month we will pay some money for not increasing money but in loan they will give us time to clear money.
I think loan is applicable to all things it may be commodities also but debt related to money only.
I have given wikipedia link above. Debt is wider term. This means everything that you owe to others. Hence in Accountancy, there is Debit (Debt) entry for all debts. Loan is a kind of debt. Loan includes principal amount and interest.
G. K. Ajmani Tax consultant http://gkajmani-mystraythoughts.blogspot.com/
I think loan is applicable to all things it may be commodities also but debt related to money only.
I have given wikipedia link above. Debt is wider term. This means everything that you owe to others. Hence in Accountancy, there is Debit (Debt) entry for all debts. Loan is a kind of debt. Loan includes principal amount and interest.
Debt will be given by any but not loan. For loan there will a lot of process it will take long time. This also depends on honesty of you towards your previous payments.
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