Although the terms debt and loan are often used interchangeably in everyday conversation, they have different meanings in Voyant.
The easiest way to determine where something belongs is to ask:
Who owes the money?
- If your client owes someone else, it should be entered as a Debt.
- If someone else owes your client, it should be entered as a Loan.
Understanding this distinction ensures your client's assets, liabilities, and cash flow are modelled correctly.
Debts
A Debt represents money that your client is responsible for repaying.
Because these are liabilities, they reduce your client's net worth and require repayments that become part of the plan's cash flow.
Common examples include:
- Student loans
- Mortgages
- Auto loans
- Credit card balances
- Home equity loans
- Personal loans
Voyant tracks the outstanding balance and models how it is repaid over time.
Loans
A Loan represents money that your client has lent to another person or organization.
In this case, the loan is considered an asset because your client expects to receive repayments in the future.
Common examples include:
- Money lent to a child
- A loan to another family member
- A personal loan to a friend
- A loan made to another business
Voyant models these repayments as future cash inflows to your client's plan.
Why is a student loan entered as a Debt?
A student loan is one of the most common examples of this distinction.
Although it is called a loan, it is entered as a Debt because the client is the person making the repayments.
If it were entered under Loans, Voyant would assume the opposite, that someone is repaying your client, which would produce incorrect cash flow and asset values.
At a glance
| If... | Use... |
|---|---|
| Your client owes money on a mortgage | Debt |
| Your client owes money on a student loan | Debt |
| Your client owes money on an auto loan | Debt |
| Your client owes money on a credit card | Debt |
| Your client lent money to a child | Loan |
| Your client lent money to a family member or friend | Loan |
| Your client lent money to another business | Loan |
Remember
If you're ever unsure which section to use, simply ask:
Is my client making the repayments, or receiving them?
- Making repayments → Debt
- Receiving repayments → Loan
That one question will help you determine the correct place to model almost every borrowing scenario.