BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is start-up loans allowing businesses to open.
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It allows businesses to borrow money from a lender at any given time, up to a certain amount of
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It is the simplest type of corporate loans.
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It is made so businesses can buy property.
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Detailed explanation-1: -A line of credit is a flexible loan from a financial institution that consists of a defined amount of money that you can access as needed. You can repay what you borrow from a line of credit immediately or over time in regular minimum payments. Interest is charged on a line of credit as soon as money is borrowed.
Detailed explanation-2: -Open-end credit also known as a line of credit allows the borrower to make repeated withdrawals throughout the draw period and payments throughout the life of the loan. Good examples of open-end credit products are credit cards, as well as both personal lines of credit and HELOCs.
Detailed explanation-3: -A line of credit is typically offered by lenders such as banks or credit unions, and, if you qualify, you can draw on it up to a maximum amount for a set period of time. You’ll pay interest only when you borrow on the line of credit. Once you pay back borrowed funds, that amount is again available for you to borrow.
Detailed explanation-4: -The main advantage of an LOC is the ability to borrow only the amount needed and avoid paying interest on a large loan.