Credit and Loans
What is debt?
A debt is the amount you owe or borrowed from someone. Loans, amounts due on credit cards and overdrafts are different forms of borrowing.
In a loan, the amount of money you borrow is called the principal. The principal is either paid back in full at the maturity date or in instalments over a period of time which ends on the maturity date. This period is called the loan period or the tenure of the loan. Interest is payable on the loan. Interest represents the cost to the lender of funding the loan as well as compensates the lender for the risk of lending to you.
Before you borrow, think about whether getting into debt is right for you.