Debt and Loan

Category: Education & Learning 8 years ago
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  • Re: Debt and Loan

    by » 8 years ago


    Debt -the word is used in financial account as provision for bad debt. They don't use the term loan.

    You are forgetting when we prepare a Balance Sheet, we post few entries under the head "Secured Loans and Unsecured Loans".

  • Re: Debt and Loan

    by » 8 years ago


    Debt -the word is used in financial account as provision for bad debt. They don't use the term loan.

    You are forgetting when we prepare a Balance Sheet, we post few entries under the head "Secured Loans and Unsecured Loans".


    Debt is a wider term. This includes loan also.

    G. K. Ajmani Tax consultant
    http://gkajmani-mystraythoughts.blogspot.com/


  • Re: Debt and Loan

    by » 8 years ago


    Friends correct me if my explanation is wrong. I am writing the difference between debt and loan in terms of economics.
    If a person takes loan and cannot repay it back for years after years, it becomes a debt. Debt is a loss which can't be recovered. Debts are also long term loans which is promised to pay but it may or may not be paid by the person. The best example of this is the loans taken by the farmers from money lenders. Unable to pay back loan, his generation keeps serving the money lender and finally his land and house is confiscated by the money lender.

  • Re: Debt and Loan

    by » 8 years ago


    Friends correct me if my explanation is wrong. I am writing the difference between debt and loan in terms of economics.
    If a person takes loan and cannot repay it back for years after years, it becomes a debt. Debt is a loss which can't be recovered. Debts are also long term loans which is promised to pay but it may or may not be paid by the person. The best example of this is the loans taken by the farmers from money lenders. Unable to pay back loan, his generation keeps serving the money lender and finally his land and house is confiscated by the money lender.


    Loan is also debt. Please see the wikipedia definition given by me in a post above. When a person takes loan, this is debt. Debt is any amount owed to some body on any account. when the debt cannot be repaid, this is 'bad debt'. Before that this is good.

    G. K. Ajmani Tax consultant
    http://gkajmani-mystraythoughts.blogspot.com/


  • Re: Debt and Loan

    by » 8 years ago


    Debts are neither loans nor taken from any one on demand. This is is one side of the balance sheet only. That can be in terms of money as well other assets. Whatever you owe to some one is debt and have to square it up. One is indebted unless the credit and debt sides are equal. Loans and debts are two different things.

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  • Re: Debt and Loan

    by » 8 years ago


    Gulshanji, I have gone through the link. When loan keeps on accumulating and person is unable to pay it back, it is bad debt. When bad debts keeps on accumulating, it becomes indebtedness.

  • Re: Debt and Loan

    by » 8 years ago


    Debts are neither loans nor taken from any one on demand. This is is one side of the balance sheet only. That can be in terms of money as well other assets. Whatever you owe to some one is debt and have to square it up. One is indebted unless the credit and debt sides are equal. Loans and debts are two different things.


    If possible kindly give some example of this.
    As far as I remember, loans can be secured or unsecured, shown in the B/S. All debts are deducted from Sundry debtors like bad debts, provision for bad debts, provision for doubtful debts.

  • Re: Debt and Loan

    by » 8 years ago


    Debts are neither loans nor taken from any one on demand. This is is one side of the balance sheet only. That can be in terms of money as well other assets. Whatever you owe to some one is debt and have to square it up. One is indebted unless the credit and debt sides are equal. Loans and debts are two different things.


    If possible kindly give some example of this.
    As far as I remember, loans can be secured or unsecured, shown in the B/S. All debts are deducted from Sundry debtors like bad debts, provision for bad debts, provision for doubtful debts.


    You see your electric bill, newspaper bill and house tax etc is debt on you which you never applied for. Once you will pay them that would be squired-up soon. That was not loan but debt for you. Bad debts are the ones, which are not paid by the creditor and have to be settled by the financial institutes.

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    Thank you said by: Devyani Sarkar

  • Re: Debt and Loan

    by » 8 years ago


    When a person needs money to fulfill his dream like home he takes money from the bank or other financiers this is called loan. But when an individual is hard pressed to pay back the loans he has taken,it is called debt.

    Sharmistha Banerjee

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