A debenture in simpler terms is a debt instrument used by companies to raise their fund. Debentures are usually documented with legal contracts between the lender and the borrower.
There are two types of debenture: Convertible debenture can convert the equity shares of the organization after a specific period. Non-Convertible debenture cannot convert the equity shares of the organization. In this case, they can demand higher interest rates.
The period of debenture is usually between 1-10 years.