Which of the following is not an element of installment credit?A.Repayment scheduleB.Fixed paymentC.Fixed loan amountD.Line of creditSUBMITarrow_backPREVIOUS
Question
Which of the following is not an element of installment credit?
A. Repayment schedule
B. Fixed payment
C. Fixed loan amount
D. Line of credit
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Solution
Analyzing the Options
To determine which option is not an element of installment credit, we need to understand what installment credit includes:
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Repayment Schedule: A structured plan that outlines how and when payments will be made. This is a fundamental element of installment credit.
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Fixed Payment: Installment credit typically involves making consistent payments over a specified period. Therefore, this is also a key feature.
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Fixed Loan Amount: In installment credit, the amount borrowed is usually fixed, meaning the borrower receives a set amount that is to be paid back over time.
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Line of Credit: A line of credit is different from installment credit; it allows borrowers to draw on a credit limit and make variable payments, and it does not have a fixed repayment schedule.
Conclusion
The answer is D. Line of credit, as it does not represent an element of installment credit. Instead, it is a different form of credit that provides more flexibility in borrowing and repayment terms.
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