DEBT SERVICE Meaning and
Definition
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Debt service refers to the process of repaying borrowed funds, typically through regular interest and principal payments made to the lender. It represents the financial obligations that an individual, household, business, or government entity must fulfill to meet their debt commitments.
In a personal finance context, debt service refers to the repayment of loans, such as mortgages, car loans, or student loans. It involves making regular payments over a specified period, addressing both the interest accrued and the outstanding principal. These payments are often made monthly and continue until the full amount owed is repaid.
For businesses, debt service encompasses the same principle of regular payments. It helps organizations manage their outstanding loans, aiding in budgeting and financial planning. Business debt service typically includes interest expenses and scheduled principal repayments, reflecting the borrowing costs and the effort to gradually reduce the loan balance.
In the realm of public finance, debt service is crucial for governments to meet their financial obligations. Governments may issue bonds or other debt instruments to finance public projects and infrastructure development. Debt service in this context involves making interest payments and repaying the principal amount to bondholders or lenders.
Overall, debt service describes the ongoing process of fulfilling financial liabilities by making regular payments towards debt, consisting of both interest and principal amounts. It is an essential aspect of financial management for individuals, businesses, and governments, ensuring the proper utilization and repayment of borrowed funds.
Common Misspellings for DEBT SERVICE
- sebt service
- xebt service
- cebt service
- febt service
- rebt service
- eebt service
- dwbt service
- dsbt service
- ddbt service
- drbt service
- d4bt service
- d3bt service
- devt service
- dent service
- deht service
- degt service
- debr service
- debf service
- debg service
- deby service
Etymology of DEBT SERVICE
The word "debt" originated from the Old French word "dete" or "deit", which referred to an obligation or a duty. It further comes from the Latin word "debitum", meaning "thing owed" or "debt". The term "service" stems from the Old French word "servise", derived from the Latin word "servitium", meaning "servitude" or "duty". When combined, "debt service" refers to the act of fulfilling obligations or duties related to debt, such as making regular payments or servicing the interest.
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