A creditor is a person, bank or financial institution to whom money or a debt is owed. In a loan, there are primarily two parties that are involved in a transaction. The debtor and the creditor usually enter a contractual relationship during a home mortgage. The debtor is the person who borrows the money while the creditor is the financial institution or bank that provides the funds. For example, say you are interested in purchasing a great beachfront condo. You just found the ideal location that is on the oceanfront and in the heart of everything. Because you do not have $1 million, you need to ask a bank for a loan. The bank agrees and decides to lend you the money. The bank is your creditor, and you are their debtor. There can even be more than a single creditor for a mortgage for loans that are taken by multiple parties.