ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed.

Detailed explanation-2: -Most commonly, the obligation owed is an obligation to pay money for some prior services or to pay off a loan. The person who owes a creditor an obligation is known as a debtor.

Detailed explanation-3: -Understanding the difference between debtors and creditors Creditors are individuals/businesses that have lent funds to another company and are therefore owed money. By contrast, debtors are individuals/companies that have borrowed funds from a business and therefore owe money.

Detailed explanation-4: -A creditor is an individual or institution that extends credit to another party to borrow money usually by a loan agreement or contract. Creditors such as banks can repossess collateral like homes and cars on secured loans, and take debtors to court over unsecured debts.