Terms of Credit
Q 1. What is the average rate of interest on home loans?
Answer-
The average rate of interest on home loans in India varies between 6%-15% per annum, and this rate varies with the banks.
Q 2. Is collateral necessary in all loans?
Answer-
No, not all loans require collateral, there are many financial institutions that do offer loans without collateral but they are unsecured loans, while the ones with collateral are secured ones.
Q 3. Do all come with interest?
Answer-
No, there are many loans that are interest-free such as education loans, interest-free car, home loans, etc.
Terms of Credit – Class 10 Economics
The economy runs with a proper cash flow in the market, and the banks maintain this cash flow by lending loans to people and institutions. However, as there is a variety of loans that banks offer, similarly every loan has its special terms and conditions.
Loan and credit help the economy move forward as it leads to development, thus leading to economic growth. However, in some cases, some loan becomes bad loan (when the borrower is not able to repay the loan). Thus the GOI and RBI have issued some strict guidelines for the issuance of the loan, based on which the credit is offered in India. The loan and terms of credit are discussed in detail below in this article.