What is Credit?
Transaction between 2 parties where one party is the creditor or lender which supplies money, good, services or securities in return for a future payment by other party the debtor or borrower. Such transaction include payment of interest to the lender.
In other words credit can be said as a formal, legal way to borrow something now (Goods, money, etc) by the promise that lender would be paid back later by the borrower/debtor. It can also include 2 parties who don’t even know each other.
Understanding Credit Sources
Credit allows consumers to purchase the product for today and arranging for a deferred payment scheduled agreeing to settle debt later. Now a days most of the borrowing taking place are handled by financial institutions, whereas the most oldest and knowned for these services are commercial bank.
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