What does creditor mean?

For other uses, see Creditors (disambiguation) and Lender (disambiguation). 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.

What is a creditor example?

Creditors are individuals or entities that have lent money to another individual or entity. They typically charge interest and the money is owed back to them. For example, a bank lending money to a person to purchase a house is a creditor.

What is the difference between a creditor and a debtor?

In contrast, borrowers with low credit scores are riskier for creditors and are often charged higher interest rates to address that risk. While the creditor is the entity that extends credit, a debtor is the legal party that accepts the credit or loan, owes the debt, and agrees to its repayment. What Happens If Creditors Are Not Repaid?