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CBSE Class 10 Answered

Explain any four terms of credit with examples.
Asked by Topperlearning User | 03 Jul, 2014, 10:09: AM
answered-by-expert Expert Answer

Four terms of credit are as listed below:

  1. Interest rates: While borrowing or lending loans, rate of interest is decided by both the parties and is specified in the document.

  2. Collateral: It is an asset that the borrower owns like house, shop, land etc. It is against such assets as a guarantee that loan is given to the borrower.

  3. Documentation required: The borrower before lending money check all the documents related to the employment record and income that is earned by the borrower.

  4. Mode of repayment: It is related to the ways and duration in which the loan can be repaid by the borrower. Long term loans can be repaid in annual, six monthly or monthly installments.

Answered by | 03 Jul, 2014, 12:09: PM

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