Advertisements
Advertisements
Question
______ costs of borrowing increase the debt-burden.
Advertisements
Solution
High costs of borrowing increase the debt-burden.
Explanation:
When interest rates or financing fees rise, a larger portion of each payment is used to service the interest rather than pay down the principal balance. This extends the time required to pay off the debt and dramatically raises the overall amount owing, putting further financial hardship on the borrower.
APPEARS IN
RELATED QUESTIONS
Compare formal sector loans with informal sector of loans regarding interest only.
Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain.
How do banks mediate between those who have surplus money and those who need money?
Why do we need to expand formal sources of credit in India?
Majority of the credit needs of the ______ households are met from informal sources.
How can the problem of unemployment be eradicated in India? Explain any three ways.
Answer the following question.
Describe the importance of formal sources of credit in economic development.
Answer the following question.
Describe the bad effects of informal sources of credit on borrowers.
Explain the importance of formal sector loans in India.
Answer the following question.
Why is cheap and affordable credit important for the country's development? Explain any three reasons.
