What Is Debt?

Debt is any money borrowed from a 3rd party that has to be paid back. Companies will typically use debt either as a cheap means of funding, or to fund purchases would otherwise be unaffordable to them. Usually, debt is repaid over a specific time period with a pre-determined rate of interest being paid on the debt. The repayments of the lump sum are called principal and the interest payments are just called interest. Often, debt has to be backed by some form of asset (known as collateral), for example the house itself backs a mortgage. Debt can be issued in many forms with the most common being bonds, mortgages or cash loans.

To learn more about this concept and become a master at bonds and fixed income, you should check out our Bond Course - Fixed Income (coming soon!).

 

Related Terms

Return to Finance Dictionary

 

 

Start Discussion

Popular Content See all

The lighter side of IB! (Hopefully)
+55IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
Why aren't Asians/Indians/Middle Eastern considered diversity
+31IBby Intern in Investment Banking - Industry/Coverage">Intern in IB - Ind
The "right" blue in excel
+18REby Portfolio Manager in Real Estate - Commercial">PM in RE - Comm
Leaving New York
+14IBby Intern in Investment Banking - Industry/Coverage">Intern in IB - Ind
Is Finance the back office of society?
+14OFFby 1st Year Analyst in Investment Banking - Industry/Coverage">Analyst 1 in IB - Ind
Do I Count as Diversity?
+12IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A

Total Avg Compensation

October 2020 Investment Banking

  • Director/MD (17) $704
  • Vice President (49) $326
  • Associates (265) $228
  • 3rd+ Year Analyst (36) $168
  • 2nd Year Analyst (147) $159
  • Intern/Summer Associate (137) $141
  • 1st Year Analyst (584) $130
  • Intern/Summer Analyst (559) $82

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.4
2
Jamoldo's picture
Jamoldo
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.9
5
redever's picture
redever
97.8
6
Addinator's picture
Addinator
97.6
7
bolo up's picture
bolo up
97.5
8
NuckFuts's picture
NuckFuts
97.5
9
frgna's picture
frgna
97.5
10
Edifice's picture
Edifice
97.3