In a ________, a bank specifies how much it is willing to lend the borrower during a specified period of time, although the bank does not guarantee the loan.
A) revolving credit agreement
B) lay away plan
C) line of credit
D) transaction loan
E) credit card advance

Question

Quizplus · Accepted Answer

A line of credit is an arrangement between a financial institution and a customer that establishes a maximum loan balance that the lender permits the borrower to access or maintain. The borrower can access funds from the line of credit at any time, as long as they do not exceed the maximum set in the agreement, and they meet any other requirements of the bank or financial institution, such as making timely minimum payments. It does not guarantee the loan but specifies the maximum amount the borrower can access.

In a ________, a Bank Specifies How Much It Is