Short-term loan that provides immediate cash by securing a borrowers written check or receiving authorization for automatic withdrawal from the borrowers depository institution account

ECONOMIC INSTITUTIONS

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Short-term loan that provides immediate cash by securing a borrower’s written check or receiving authorization for automatic withdrawal from the borrower’s depository institution account

A	Title loan
B	Pawn loan
C	Payday loan
D	None of the above

Explanation:

Detailed explanation-1: -Payday loans are short-term loans that allow you to access cash quickly and sometimes require full repayment with interest at your next payday. Payday loans can be a risky choice because the interest rates are usually much higher than other types of credit.

Detailed explanation-2: -While there is no set definition of a payday loan, it is usually a short-term, high cost loan, generally for $500 or less, that is typically due on your next payday. Depending on your state law, payday loans may be available through storefront payday lenders or online.

Detailed explanation-3: -Amortized Loan: A loan to be repaid, by a series of regular installments of principal and interest, that are equal or nearly equal, without any special balloon payment prior to maturity.

Detailed explanation-4: -Collateralized Personal Loans Another type of borrowing is the collateralized personal loan, in which the borrower offers an item of value as security for a loan. The value of the collateral must meet or exceed the amount being loaned.

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

ECONOMIC INSTITUTIONS