A loan commitment is not effective or binding until it has been accepted by the borrower.

Question

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A loan commitment is a lender's promise to provide a specific amount of financing to a borrower. However, it is not binding until the borrower accepts the terms of the commitment, which may include interest rates, repayment terms, and fees. Once the borrower accepts the commitment, it becomes a legal contract between the lender and the borrower.

A Loan Commitment Is Not Effective or Binding Until It