Terms of Credit
In addition to the principal payments, each loan agreement specifies an interest rate that the borrower must pay to the lender. Lenders may also need collateral (security) as payment for loans. A borrower’s collateral is an asset that he or she owns and uses to guarantee the repayment of a loan to a lender. If the borrower fails to make payments on the loan, the lender has the authority to sell the asset or collateral to recoup the payment. The credit terms include the interest rate, collateral and documentation requirements, and repayment method. The terms of credit vary greatly from one credit arrangement to the next.
Loan Activities of Banks
Loan Activities of Banks: Money is an enthralling subject full of enigmas. For the pupils, it is critical to capture this element. The evolution of money and how different forms were employed at different times is a fascinating topic. Modern money is intertwined with the banking system. Credit is a critical component of economic life, thus it’s vital to grasp the notion first. Another important aspect of credit is that it is available to everyone, including the poor, and on reasonable terms. We must emphasize that this is a people’s right and that without it, a big portion of the population would be excluded from the development process.
Loan Activities of Banks