Question

define interest rate, collateral, documentation requirement and mode of repayment

Answer 1

Every loan agreement specifies aninterest rate which the borrower must pay to the lender along with therepayment of the principal, this is called the terms of credit. In addition to the interest , lenders may demand collateral (security) against loans.

Terms of Credit - Money and Credit 


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Answer 2

Interest rate:

The interest rate is the volume of moneylender charges for the use of possessions uttered as a percentage of the principal.  

Collateral:

Collateral is a property or other asset that a debtor offers as a way for a lender to protect the loan.  

Documentation requirements:

A requirements document defines what is required for the product. It states the product's aim and what it must attain.

Repayment:

Repayment is the act of paying back money formerly borrowed from a lender.

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