A "commitment fee" is used in arranging for a:
A) commercial loan.
B) character loan.
C) installment loan.
D) line of credit.

Question

Quizplus · Accepted Answer

A commitment fee is typically charged by a lender to a borrower who has been approved for a line of credit but has not yet used it. It is a fee charged to maintain the availability of the line of credit and compensate the lender for committing to lend the money. Therefore, the best choice is D, a line of credit.

A "Commitment Fee" Is Used in Arranging for A