Question

Find the incorrect option:
Terms of Credit comprise of interest rate, collateral, documentation and mod
of repayment.
) Terms of Credit comprise of collateral, documentation and mode of repaymen
) Terms of Credit comprise of interest rate, collateral and documentation
Terms of Credit comprise of interest rate, collateral, and mode of repaymer
Revision Papers​

Answer 1

Find the correct option:

a) Terms of Credit comprise of interest rate, collateral, documentation and mode of repayment.

b) Terms of Credit comprise of collateral, documentation and mode of repayment

c) Terms of Credit comprise of interest rate, collateral and documentation

d) Terms of Credit comprise of interest rate, collateral, and mode of repayment

ANSWER:  a) Terms of Credit comprise of interest rate, collateral, documentation and mode of repayment

Explanation:

• Terms of credit include collateral, rate of interest, documentation requirement, and the repayment mode. The terms of credit differs substantially from one credit arrangement to another. They can differ depending on the nature of the borrower and the lender
• While borrowing or lending loans, rate of interest is decided by both the parties and a document is specified
• The collateral is form of guarantee/security  and is given to the term loan lender till the loan is  fully repaid. If the borrower does not repay the loan, or fails to repay the loan, the term loan lender has all the rights to sell the assets/collateral to obtain the payment
• The borrower before lending money check all the documents related to the employment record and income that is earned by the borrower.
• The repayment mode is the ways and duration wherein the loan is repaid by the borrower.

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