what is credit and its features ? class 10 (economics)
Answers
Credits are the trust which provides one to give loans to other....it helps the borrower financially..... interest rate is charged... collateral is required
Answer:
The Credit refers to an agreement under which goods and services, or money is exchanged against a promise to pay later. This agreement is largely based on trust.
Another definition of Credit refers to the money given by banks to its customer and the later has to pay it on time. If he fails to pay the same on time, he will be charged by the bank.
Terms of Credit. Every loan agreement specifies an interest rate which the borrower must pay to the lender along with the repayment of the principal, this is called the terms of credit. ... ii) The annual interest rate on the loan is 12 per cent. iii) The loan is to be repaid in 10 years in monthly installments.
Four terms of credit are as listed below: Interest rates: While borrowing or lending loans, rate of interest is decided by both the parties and is specified in the document. Collateral: It is an asset that the borrower owns like house, shop, land etc.