debt-repayment

Vocabulary Word

Definition

Debt repayment is the act of paying back a loan. It usually includes paying the principal (the original amount of money borrowed) and interest (the cost of borrowing). It's similar to returning a borrowed car with extra fuel for the owner's use.

Examples in Different Contexts

In personal budgeting, 'debt-repayment' is an essential component of financial planning, prioritizing the reduction of outstanding debts. A personal finance coach might advise, 'Allocating a portion of your monthly budget to debt-repayment is crucial for achieving financial freedom.'

Practice Scenarios

Sustainability

Scenario:

The green project we undertook is proving to be profitable. How should we utilise the funds coming in from it?

Response:

Using part of the profit for debt-repayment seems logical. It will put us in a better position for future sustainability projects.

Academics

Scenario:

You've finally landed a great job after graduation. How do you plan to cope with the financial commitments you have?

Response:

First thing on my list is to plan my debt repayment for the student loans. I want to be free from debt as soon as possible.