Debt

Debt is defined as an obligation owed by one individual or legal entity to another. It is the obligation of an entity, country, institution, individual or legal entity to pay (repay) an amount of money at a given time.

Debt can serve different purposes. For example, governments borrow to finance expenditures, companies to acquire capital equipment, and individuals to consume or purchase a home.

Debt can be classified according to different criteria:

• According to who incurs it: public debt or private debt.
• According to its guarantee: Personal debt or mortgage debt
• According to its term: Short-term debt or long-term debt.
• According to the instrument by which it is formalized: Bonds, Bills, etc

The higher the risk of non-payment of the debt, the higher the interest rate the debtor will have to pay.

You can see the debt and its evolution in debt comparison by country.