Introduction
There are different types of debts and some of them include loans and bonds. A loan is the amount that a person or company borrows from another party for a period of time while a bond is a financial instrument of the government. A debt is where one party owes another for a good received or a service rendered. In accounting, these debts are in monetary terms. Bonds are tradable while loans are not. This paper examines the differences between loans and bonds as well as their definitions.

Definition of a loan
A company may take a loan from a bank or a financial institution. In loans, the person or company pays back them agreed amount in a certain amount of time. This amount of money accrues an interest over time. In loans, the person who takes the money is the borrower, while the one who gives the money is the lender. The money that the lender gives is called the principal amount. The borrower pays the principal amount in regular installments. In an annuity, every installment is the same over the period of time. The concept of a loan is that the borrower pays the lender the principal amount in addition to some interest that the loan accrues over time. Lenders and financial institutions often make a lot of money from interests (Hale 22).

Definition of a bond
A bond is a financial instrument by the government. The government raises money by selling bonds to people. Companies can also sell bonds. For example, a company may sell a bond of about 2,000$ and then it agrees to pay the bond in a period of 20-30 years. However, the firm will pay interest in the interim. The interest is in terms of a percentage. If an individual buys this bond, they pay the principal amount but they get interests during the term of the bond. Bonds are debt securities. In this case of bonds there is a lender/ creditor and there is a borrower. The general public is the creditor and the financial institution or the government is the borrower. The government is the issuer and they have the debt of the buyer of the bond. Upon maturity of the bond, the government ought to pay the borrower the principal amount. The government benefits because it uses the money to fund its expenditure and investments. One advantage of bonds is the fact that they pay the corporations better interests than the interest it would get by borrowing a loan from the bank (IRS np).

Differences
The difference between a loan and a bond is, people can trade the bond easily. There are different markets to trade bonds. An individual can chose to sell bonds and this means that he/she does not have to wait for the term of the bond in order to sell it. Loans are not tradable unlike bonds. Loans are agreements between the borrower and the lender. In loans, the bank has an obligation to make sure that the term is over and that the borrower pays over the agreed term. However, loans have started being tradable in the case of financial instruments like securization and derivatives.

Conclusion
In conclusion, loans and bonds are different. A loan is the amount that a person or company borrows from another party for a period of time while a bond is a financial instrument of the government. In loans, the person who takes the money is the borrower while the one who gives the money is the lender. In bonds, the general public is the creditor and the financial institution or the government is the borrower.