Question

Megha has taken a loan of Rs.5 lakh from the bank to purchase a house. The annual interest

rate on the loan is 12% and the loan is to be repaid in 10 years in monthly instalments. Megha

had to submit to the bank, documents showing her employment records and salary before the

bank agreed to give her loan. The bank retained as collateral the papers of the new house,

which will be returned to Megha only when she repays the entire loan with interest.

Megha’s mode of repayment:

A. Annual interest 12%

B. The bank retained the papers of the new house.

C. Monthly instalment in cash/ cheque

D. Submission of employment record and salary.​

Answer 1

$\huge\red{answer}$⇒The bank retained as collateral the papers of the new house, which will be returned to Megha only when she repays the entire loan with interest.

$\huge\orange{@alurringbabe}$

Answer 2

When banks give a loan, they always take something that is in the possession of the person who takes the loan as a collateral. A collateral is something that is pledged as security to the bank as the promise to the bank that the loan taken will be re payed. If the loan is not re payed in due time, the bank has the authority to seize the collateral.

Megha's mode of repayment is B. The bank retained the papers of the new house.