BANKING AFFAIRS

Detailed explanation-1: -What Is a Default? Default is the failure to make required interest or principal repayments on a debt, whether that debt is a loan or a security. Individuals, businesses, and even countries can default on their debt obligations.

Detailed explanation-2: -Open-end credit also is referred to as a line of credit or a revolving line of credit. Open-end loans, like credit cards, are different from closed-end loans, like auto loans, in terms of how the funds are distributed and whether a consumer that has started to pay down the balance can withdraw the funds again.

Detailed explanation-3: -An open-ended loan is a loan that does not have a definite end date. Examples of open-ended loans include lines of credit and credit cards. The terms of open-ended loans may be based on an individual’s credit score.

Detailed explanation-4: -A closed-end loan is a loan given with a specified date that the debtor must repay the entire loan and interest. These loans are normally disbursed all at once in order for the debtor to buy or achieve a specific thing, and often, the creditor gains rights to possess the item if the debtor fails to repay the loan.