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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Debt Service

Definition:

Debt service refers to the interest you pay on a debt in a year.

Why do you need to know this stuff? Well, for the IRS. The IRS may give you a tax break on the interest you pay on a business loan, so you may need to tally up the interest you've paid in a tax year. Banks might be interested in your debt service if you apply for a loan and the bank needs to figure out whether you have too much debt already.