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a bond is basically alone an entity such as a company a municipality or a country needs money and issues a bond that entity is obviously called the bond issuer and the amount of money it receives is called the principal it receives that money from another entity intuitively called the bondholder maybe a person perhaps a company or why not a country of course the bondholder doesnt just want the principal back from the bond issuer he also expects interest on top of that also called the coupon and finally it is clearly stated when the deal between the two parties ends or in other words what the so-called maturity date is however unlike with loans that you make to friends for example bonds are financial instruments that can be bought and sold on the open market lets assume Max made a fifteen thousand dollar loan to his friend Jack if Max ends up needing cash quickly for an emergency he can of course ask Jack to pay him back sooner but if Jack cannot do that or refuses Max wont have many
