Define–(a) collateral (b) cheque (c) debt trap (d) terms of credit?
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a)collateral:It is an asset that the borrower owns and uses this as a guarantee to a lender until the loan is repayed.
b)cheque:An order to a bank to pay a stated sum from the drawer's account, written on a specially printed form.
c)dept trap:Suppose a person takes a loan and due to unawardable circumstances bus is not able to repay ures loan. Now he faces a difficult situation and has to take a tough decision, either he has to borrow a fresh loan or sell some part of his property to repay the earlier loan.
d)terms of credit:Interest rate,collateral and documentation requirement an the mode of repayment together comprise what is called the terms of credit
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