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45 Examples of Debt

John Spacey, January 22, 2022

A debt is an obligation to pay. This can result from borrowing, purchases, business operations, taxation, penalties and fees. Debt is considered a basic feature of a modern economic system that facilitates economic production, stability and growth. It can also be problematic where it is excessive, unproductive or unethical. The following are common types of debt followed by explanations and discussion.

Accounts Payable	Advances
Auto Loans	Bearer Bonds
Bridge Loans	Commercial Debt
Construction Loans	Contractual Debt
Convertible Debt	Corporate Bonds
Court-Ordered Debt	Credit Cards
Demand Loan	Farm Loans
Fixed Rate Loans	Government Bonds
High-Interest Loan	IOU
Inflation-Linked Bonds	Installment Loans
Junk Bonds	Line of Credit
Medical Debt	Microloans
Mortgage Bonds	Mortgages
Municipal Bonds	Overdraft Loans
Personal Loans	Promissory Notes
Registered Bonds	Revolving Credit
Savings Bonds	Secured Debt
Small Business Loans	Store Credit
Student Debt	Syndicated Loan
Tax Debt	Term Loan
Unpaid Bills / Expenses	Unpaid Wages
Unsecured Debt	Variable Rate Loans
Verbal Agreements

Accounts payable are funds due from a business to its suppliers.

Advances are early payments against some expected future payment. For example, a record label that gives an artist an advance against expected loyalties for a new album.

Bearer bonds are bonds with no registered owner such that anyone can cash them. Currently rare.

A bridge loan spans the gap between buying a new home and selling an existing home.

Convertible debt is debt that can be exchanged for another type of security. This particularly applies to corporate bonds that can be exchanged for stock.

A demand loan includes terms that allow the lender to demand payment at any time.

Inflation-linked bonds are typically government bonds that have interest linked to inflation. These are are intended to help create a zero risk way to save for small investors.

An IOU or "I owe you" is an informal note that records a loan between individuals.

Junk bonds are corporate bonds that are high risk such that there is a significant probability they will not be fully repaid.

Medical debt is a type of debt in the United States and other countries where medical care is privatized such that people can incur high fees for medical treatment.

Microloans are loans to very small businesses. These can produce much economic growth and improve social stability by helping people to establish a business.

Mortgage bonds are securities for investment that are essentially packages that contain many mortgages.

Overdraft loans are bank accounts that are allowed to go into a negative balance with the negative balance becoming a loan. These are typically small loans that may have reasonably high interest as well as fees.

A promissory note is a legal document that commits to a future payment based on terms specified in the document.

Revolving credit is a loan that doesn't have fixed payments such that you can pay it down or draw from it as required. This may have monthly minimum payments based on your current balance. This is familiar to consumers as credit card debt and lines of credit.

Savings bonds are government bonds that are designed to be directly purchased by consumers.

Secured debt is debt that is backed by an asset. This means that your creditors have rights to the asset if you don't meet the terms of the debt agreement. For example, if you miss payments.

A syndicated loan is a loan that is provided by multiple entities such as multiple banks.

Tax debt is a debt that results from tax obligations.

A term loan is a loan with regular payments and a fixed length. This can be contrasted with a revolving loan.

Good Debt

Good debt creates value and is sustainable. For example, an affordable mortgage on fair terms that allows a family to pay for a property as they use it. Commercial debt and small business debt can put capital to work to create jobs, goods and competitive strengths such as knowledge and infrastructure. Government debt can serve as an important financial instrument that allows for relatively risk-free saving.

Bad Debt

Bad debt is excessive, doesn't create value or has high interest or penalties. For example, high interest credit card debt that is incurred to buy luxuries that an individual can't afford.

Unethical Debt

Debt can be used to exploit individuals in a disadvantaged position such as poverty. For example, debt bondage whereby an individual is forced to work to pay off a debt. Likewise, high-interest lending can be problematic or unethical. At least 76 countries apply some form of interest rate caps on consumer loans.†