. Mr. Dhiman took a loan of Rs.20 Lakhs Mr. Dhlman took a loan of Rs. 20 Lakhs from bank to purchase a house.


The annual rate of Interest on the loan is 12% per annum and the loan is to be repaid in 10 years in instalments. The bank retains the papers of the new house as collateral, which will be returned to Mr.Dhiman only when he repays the entire loan amount with interest. Analyse the loan information given above and choose the right option for the same.

1. Mode of Repayment

2. Interest on Loan 

3. Terms of Credit

4. Collateral

Best Answer

Ans: 3

Sol: Terms of Credit are required to satisfy credit arrangements. It comprises of- Interest rate, collateral, documentation requirement and the mode of repayment, together is called the terms of credit.

 

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