Which is an example of closed end credit?

A closed-end loan is to be contrasted with an open-ended loan where the debtor borrows multiple times without a specified repayment date like with a credit card. Examples of closed-end loans include a home mortgage loan, a car loan, or a loan for appliances.

What is an example of open end credit?

Common examples of open-end credit are credit cards and lines of credit. As you repay what you’ve borrowed, you can draw from the credit line again and again. Depending on the product you use, you might be able to access the funds via check, card or electronic transfer.

Which best describes open end credit?

Open-end credit is an agreement that allows the borrower to use a specific amount of credit over a period of time.

What are examples of open and closed ended credit?

Generally, real estate and auto loans are closed-end credit. Conversely, home equity lines of credit (HELOC) and credit cards are examples of open-end credit. Open-end credit agreements are also sometimes referred to as revolving credit accounts.

What is open end credit also known as?

Open-end credit, also called revolving credit, can be defined as a line of credit that gives the borrower a certain limit of credit and the ability to frequently borrow as little or as much of that money and repay any amount utilized below the set limit within a specified period.

Which is the best example of closed-end credit?

A mortgage is an example of closed-end credit (T/F). A loan from a family member is an example of an expensive loan (T/F). A borrower is a credit card holder who does not pay off his or her balance in full each month (T/F).

What is open credit?

An open credit is a financial arrangement between a lender and a borrower that allows the latter to access credit repeatedly up to a specific maximum limit. Once the borrower starts making repayments to the account, the money becomes available for withdrawal again since it is a revolving fund.

What is open-ended loan?

An open-ended loan is a loan that does not have a definite end date. Examples of open-ended loans include lines of credit and credit cards. The terms of open-ended loans may be based on an individual’s credit score.