Debtee refers to an entity or individual to whom a debt is owed. Whenever you ask for a loan or credit, you are borrowing money from a debtee. Debtees are entitled to receive scheduled payments. A borrower is obligated to follow the loan agreement. If you owe money to a debtee, you may be referred to as a debtor or borrower. 

Is there such a word as debtee?

Yes, debtee refers to the person or entity that lends to the debtor. There are also other words that are synonyms of debtee:

  • Lender
  • Creditor 
  • Borrowee. 

Who are the debtor and debtee?

The debtor refers to the person or entity borrowing money, while the debtee is the one conceding the credit. Whenever someone borrows money, there are two intervenients in the transaction. The person that borrows, and the one that concedes the money.

Debtee vs debtor

A debtee is a person or entity that will receive the payment for the borrowed funds. While the debtor is the person or entity borrowing that money. The debtor has the obligation to return the borrowed funds to the debtee, within the stipulated contract between the two.

Although it depends on the agreement between the two parties, the debtor usually has a set of obligations to abide by. Here are two of the most relevant:

  • Agree to repay the loan to the lender
  • Ensure payments are made within the agreed time frame

The contract between debtors and debtees

Whenever a person or entity concedes credit, an agreement has to be signed outlining the conditions in which the debt repayment will be made. After agreeing to the financing conditions and terms, both the debtor and lender will sign the contract. The contract will not only outline the scheduled payments that need to be made, but also the obligations of both parties.

How do debtees make money?

A debtee makes money by charging interest on the amount they lend. It may also charge fees either upfront or during the loan repayment to the debtor. There are usually fees associated with any credit, like late payment fees that could also be charged.

Since the lender is taking a risk when giving credit to the debtor, he needs to be compensated.

Finally, if a debtor is unable to return the borrowed cash, the creditor normally has the right to pursue recovery of what is due, which is when repossession, foreclosure, and debt collectors may be used. 

If a loan cannot be repaid, then the debtee may be forced to file a formal claim in court or engage a debt collection agency to retrieve his funds. For example, if the debtor gave his assets as a guarantee that the loan will be prepared, then the lender may take possession of those assets.