Debts are not always negative.

I need to buy a house, a car I want to start a business but I don't have enough cash with me what do I do shall I borrow it? This question arises in everybody's life at least once in the lifetime. Yes you can borrow it as this is the time when debt has a positive side to it. Moreover you can easily repay the debt amount in monthly installments.

The negative side for debt is, you can actually end-up drowned in too much debt. Interest rates always comes in picture whenever you incur any debt. As time passes, the interest usually becomes higher than the principal. You must be able to repay the debt faster than the interest.

Debts are not only incurred by individuals, also by companies, nations and institutions. Debt is also denominated in a given monetary currency; therefore it is also dependent on the inflation and deflation rates. Changes in the value of the currency may affect the size of the debt.

Economy of countries is also affected due to excessive debt accumulation. Historically, too much accumulation of debt has been blamed for economic instabilities. Stock Markets dropped because of excessive debt. Deflation then came into the picture. Consumption and investment were then lowered down, in effect, expectation for future returns lowered. Because the demand decreased, unemployment increased. This also led to a number of bankruptcies; Deflation came in as there was decrease in demand.

Throughout the years people have been critical of debts but there are different stands on the same of different institutions. From the Marxist criticism, debt is viewed as a form of slavery. The subject or debtor is not legally owned by the creditor but he is bound to perform labor or work to repay the debt.

Debts, if not repaid immediately, may reach what is known as the "usury" effect. It is defined as excessive rate of interest. There are also debts incurred by the state. Odious debts are those incurred by a regime for purposes not that of the people. Because of this, it is not considered a debt of the state but a debt of the regime.

Despite the different kinds of debt, before each debt is transacted, both the creditor and debtor must agree to the terms of payment. The terms of payment is usually known as the standards for deferred payment. The payment can be done in an installment basis, or a one-time-big-time payment based on the agreement

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