Debt Creditor

A debt creditor refers to a person or a financial institution to whom money is owed. It can refer to an individual, organization, company or government that has a claim to the services of a second party. The creditor is usually the first party and provides property or service to the second party under the assumption that the second party will return an equivalent property or service. A debtor or a borrower is usually referred to as a second party.

A creditor always expects a repayment with or without interest depending on the terms of the agreement. Often however, the repayment is always with interest. Normally a debtor and a creditor agree on manner of repayment in what is known as the standard of deferred payment.

Repayment of a debt is normally in terms of A sum of money in units of currency. In other cases however, the repayment may be in terms of goods. Payment can be done in installments over a period of time or it can be paid once in a lamp sum at the end of a loan agreement.

Most people go for mortgage loans when they want to purchase houses or homes. In this kind of arrangement, the money borrowed is used to purchase the property. When it comes to a mortgage, the debt creditor or the lending institution is given the security, that is, a lien on the title to the property until the mortgage is paid in full. If the borrower defaults, the lending institution has the legal right to take possession of the property and sell it to recover the borrowed money.

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