You may have come across creditors and debtors, but it can be quite confusing to remember which one is which!

A creditor is a person or business that lends money, which must be repayed by the person it is lent to. So people who lend you money are called your creditors, and you are their debtor as they owe you money.

There are various types of agreements in terms of repayment of debt to a creditor, it could be monthly, or a one off payment, creditors may occasionally also take some collateral against the money that they have lent to offer them some sort of security against the repayment being made.

Related Articles

Credit Limit
Minimum payment

More Financial Words and Vocabulary Explained