ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Interest is the monetary charge for borrowing money-generally expressed as a percentage, such as an annual percentage rate (APR). Interest may be earned by lenders for the use of their funds or paid by borrowers for the use of those funds.

Detailed explanation-2: -Credit refers to any form of deferred payment, the granting of a loan and the creation of debt.

Detailed explanation-3: -Collateral is any valuable asset-like a car or a home, for example-that can help borrowers qualify for and secure a loan. Collateral may reduce risk for lenders by ensuring they obtain security for some or all of a loan. Secured loans are a type of loan that requires collateral.

Detailed explanation-4: -Collateral. Something of value (often a house or a car) pledged by a borrower as security for a loan. If the borrower fails to make payments on the loan, the collateral may be sold; proceeds from the sale may then be used to pay down the unpaid debt.