Debt is generally subject to contractual terms regarding the amount and timing of repayments of principal and interest.
A simple way to understand interest is to see it as the "rent" a person owes on money that they have borrowed, to the bank from which they borrowed the money.
Commonly, people in industrialized nations use consumer debt to purchase houses, cars and other things too expensive to buy with cash on hand.
In addition, different day count conventions exist, for example, sometimes each month is considered to have exactly thirty days, such that the interest payment due is the same in each calendar month.
The annual percentage rate (APR) is a standardized way to calculate and compare interest rates on an annual basis.
The borrower may be a sovereign state or country, local government, company, or an individual.
The lender may be a bank, credit card company, payday loan provider, business, or an individual.