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CBSE Class 10 Answered

explain terms of credit
 
Asked by Srinivas | 07 Oct, 2015, 11:30: AM
answered-by-expert Expert Answer

Terms of credit are as follows:

  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. The borrower uses assets as a guarantee to a lender until the loan is repaid.
  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. 
Answered by Tharageswari S | 07 Oct, 2015, 01:00: PM

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