Question

How do farmers get in debt trap? Why are Terms of Credit required for a loan or credit? Explain​

Answer 1

hey mate,

Farmers usually take crop loans at the beginning of the season and repay the loan after harvest. ... So, the farmers have to sell a part of their land to repay the loan. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap.Terms of credit are the requirements need to be satisfied for any credit arrangements. It includes interest rate, collateral, documentation and mode of repayment. However the terms of credit vary depending upon the nature of lender, borrower and loan.

THANK YOU ✌️✌️

PLEASE MARK BRAINLIEST

Answer 2

Answer:

Interest rate, collateral ,documentation requirements and the mode of repayment together compromise terms of credit