ECONOMICS
ECONOMIC INSTITUTIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There are no long-term issues.
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Low interest accumulation, cycle of debt, dishonour fee, dishonour fee.
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defaulting fee payable
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Default payment, high interest accumulation, snowball into a cycle of debt, dishonour fee.
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Detailed explanation-1: -When a loan defaults, it’s sent to a debt collection agency whose job is to collect the unpaid funds from you. A loan default can drastically reduce your credit score, impact your future eligibility for credit and even lead to the lender seizing your personal property.
Detailed explanation-2: -Many payday lenders do not rely on a credit check at all. They understand that most borrowers looking for payday loans typically do not have the best credit. Instead, lenders make up for the increased credit risk by charging higher interest rates and more fees.
Detailed explanation-3: -Cost of a payday loan A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. By comparison, APRs on credit cards can range from about 12 percent to about 30 percent.
Detailed explanation-4: -1) Credit Score. Lenders determine loan amounts based on a borrower’s credit score. 2) Credit History. 3) Debt-to-Income Ratio. 4) Employment History. 5) Down Payment. 6) Collateral. 7) Loan Type & Loan Term. Apply for a Loan with HRCCU. 06-Aug-2021