Question

Rita has taken a loan of Rs. 7 lakhs from the bank to purchase a car. The annual interest rate on
the loan is 14.5 per cent and the loan is to be repaid in 3 years in monthly instalments.
The bank retained the papers of the new car as collateral, which will be returned to Rita
only when she repays the entire loan with interest.
Analyse the loan information given above, considering one of the following correct option.
a. Mode of re-payment
b. Terms of credit
c. Interest on loan
d. Deposit criteria
please answer!

Answer 1

Answer:

It should be (b)terms of credit

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Answer 2

b) Terms of credit

Explanation:

Rita has taken a credit of Rs. 7 lakhs from the bank to purchase a car.

The terms of this loan are:

Annual interest rate - 14.5%

Term of credit - 3 years

Collateral - Papers of the new car.

Rita is required to pay back the loan in monthly installments which will be calculated by the bank after considering the prinicipal and interest amount for the period of the loan. Once the loan is paid back in full, the papers of the car will be handed over to Rita.