BANKING AFFAIRS

Detailed explanation-1: -What Is Closed-End Credit? Closed-end credit is a loan or type of credit where the funds are dispersed in full when the loan closes and must be paid back, including interest and finance charges, by a specific date.

Detailed explanation-2: -In a loan transaction, the date on which the term of the loan expires and the outstanding principal balance of the loan must be repaid to the lender. All other amounts payable by the borrower under the loan agreement, such as interest, fees, and expenses, must also usually be paid at maturity.

Detailed explanation-3: -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.

Detailed explanation-4: -Closed-end credit allows you to borrow a specific amount of money for a finite term. By contrast, open-end credit is revolving credit like a credit card that enables you to borrow repeatedly with no specified repayment date.

Detailed explanation-5: -If you take out an installment loan, such as an auto loan, this is a form of closed-end credit with a fixed interest rate and payment. Open-end credit, on the other hand, is revolving credit that allows you to continually access money as you make payments and only pay interest on what you use.