ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is a prearranged loan for a specific amount that you can use by writing a special check. Repayment is made in installments over a set period, and the finance charges are based on the amount of credit used during the month and on the outstanding balance.

Detailed explanation-2: -An LOC is an arrangement between a financial institution-usually a bank-and a customer that establishes the maximum loan amount that the customer can borrow. The borrower can access funds from the LOC at any time as long as they do not exceed the maximum amount (or credit limit) set in the agreement.

Detailed explanation-3: -Credit. Borrowing money, or having the right to borrow money, to buy something. Usually it means you’re using a credit card, but it might also mean that you got a loan.

Detailed explanation-4: -Home loan. Loan against property (LAP) Loans against insurance policies. Gold loans.