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Question
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A House Loan Megha has taken a loan of 75 lakhs from the bank to purchase a house. The annual interest rate on the loan is 12 percent and the loan is to be repaid in 10 years in monthly instalments. Megha had to submit to the bank, documents showing her employment records and salary before the bank agreed to give her the loan. The bank retained as collateral the papers of the new house, which will be returned to Megha only when she repays the entire loan with interest. |
- From which source of credit Megha has taken loan?
- Explain the terms of credit given in the source.
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Solution
- Megha has taken housing loan from the bank.
- Terms of credit are the requirements needed to be satisfied for any credit arrangements. It includes interest rate, collateral documentation and mode of repayment. Interest rate here is 12 percent.
Collateral documentation: Employment records and salary account documents required.
Mode of Repayment: 10 years in monthly instalments.
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