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प्रश्न
Explain any three terms of Credit.
Explain the three important 'terms of Credit'.
उत्तर
Interest rate, collateral and documentation requirement, and the mode of repayment together comprise what is called the terms of credit. The terms of credit vary substantially from one credit arrangement to another. They may vary depending on the nature of the lender and the borrower. The next section will provide examples of the varying terms of credit in different credit arrangements.
- Interest rates: The interest rate is the rate elicited when borrowing and lending loans the interest rate is stated in the document.
- Collateral: It is an asset that the borrower owns, such as a house, shop, or property. It is used to borrow money. It is a guarantee to a lender that the loan will be repaid.
- Documentation required: Before lending money, lenders review all documents related to the borrower's employment history and income.
- Mode of Payment: It is the time frame for repaying the loan. Long-term loans can be repaid in 12 months, 6 months, or monthly instalments via cash, check, or other means.
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संबंधित प्रश्न
Farmers usually take crop loans at the beginning of the season and repay the loan after ______.
Sometimes lenders demand against loan ______.
Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the ______.
Most of the informal lenders charge ______.
The rich households are availing cheap credit from formal lenders whereas the poor households ______.
The difference between what is charged from borrowers and what is paid to depositors is ______.
Why do most of the rural households still remain dependent on the informal sources of credit? Explain.
How do Self Help Groups help borrowers to overcome the problem of lack of collateral? Explain.
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A House Loan Megha has taken a loan of 75 lakhs from the bank to purchase a house. The annual interest rate on the loan is 12 percent 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 the 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. |
- From which source of credit Megha has taken loan?
- Explain the terms of credit given in the source.
Read the given source and answer the questions that follow:
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Loans from Cooperatives Besides banks, the other major source of cheap credit in rural areas are the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives and industrial workers cooperatives, etc. Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place. Krishak Cooperative provides loans for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses. |
- 'Cooperative society' is an example of which source of 'credit'? (1)
- Explain the contribution of Cooperative Societies in rural development. (1)
- Mention any two sources of capital for Self-Help Groups. (2)
