Management and Organizational Studies 2277A/B Chapter 6: Chapter 6
31 Mar 2018
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Document Summary
Credit - funds provided by a creditor to a borrower that the borrower will repay with interest or fees in the future. Instalment loan - a loan provided for specific purchases, with interest charged on the amount borrowed. Repaid on a regular basis, generally with blended payments. Revolving open-end credit - credit provided up to a specified maximum amount based on income. Limit is determined by the borrower"s income, debt level, credit history and other factors. Can be referred to as a demand loan because the financial institution can ask for repayment at any time. Allows you to achieve goals sooner than you otherwise might have been able to. Make purchases where cash is not an option. Interest costs increase what you would have regularly paid for items. Documents how timely you are repaying your obligations. Usually involves: filing an application form, negotiating the interest rate, and negotiating the loan contract.
