Debt Service

Debt service refers to the total amount of money a borrower must pay periodically to cover both the interest and the principal on a debt, such as a loan or bond. It includes scheduled payments that ensure the debt is fully repaid over time. For an organization or government, managing debt service is essential to maintaining financial stability, as it affects cash flow and budget planning. Essentially, debt service is the cost of borrowing, representing the ongoing financial commitment required to meet debt obligations.