Debt and Loan

Debt is the principal amount which we have to pay and if we take loan we have to pay both principal amount and the interest.

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

I think loan is applicable to all things it may be commodities also but debt related to money only.

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.

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

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

Both are dangerous when we had no money to pay to them.

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

Both are dangerous when we had no money to pay to them.

In one word both are same and dangerous.

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.

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.

This all are related to money factors.So one should not be fall under debt.It can destroy life also.

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 -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.

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.

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.

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.

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.

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.

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.

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.