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- August, 2017 Debt service is a term used to describe the payments made on a loan or debt. These payments can be made on a monthly, quarterly, or yearly basis, and may include principal, interest, or other fees. Debt service payments are typically used to pay off the principal balance of a loan or debt over time, as well as any associated interest or fees. In some cases, debt service payments may also be used to pay down the principal balance of a loan or debt. Debt service payments can be made to a lender, creditor, or other third party, depending on the details of the loan or debt.