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SAI INTERNATIONAL SCHOOL, BHUBANESWAR.
                                        Class X: SOCIAL STUDIES – ECONOMICS

                               CHAPTER – 3 - MONEY AND CREDIT  (PAGE NO. 44-47)
                                                      LESSON NOTES


               NOTES-

               TERMS OF CREDIT
               1.      Every loan agreement specifies an interest rate which the borrower must pay to
                       the lender along with the repayment of the principal.
               2.      In addition, lenders may demand collateral (Security) against loan.
               3.      Collateral is an asset that the borrower owns (such as land, building vehicle,
                       livestocks, deposits with banks)  and uses this as a guarantee to a lender until
                       the loan is repaid.
               4.      If the borrower fails to repay the loan, the lender has the right to sell the asset or
                       collateral to obtain payment.
               5.      Interest rate, collateral and documentation requirement and documentation
                       requirement, and the mode of repayment together comprise what is called the
                       terms of credit.
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