CREDIT ARRANGEMENT Meaning and
Definition
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Credit arrangement refers to a formal agreement between a lender and a borrower in which the lender agrees to extend a predetermined amount of credit to the borrower, who agrees to repay the borrowed amount along with any applicable interest within a specified period. This financial arrangement typically involves a credit facility, such as a credit line or revolving credit, which allows the borrower to access funds as needed within an agreed-upon limit.
A credit arrangement usually involves several key components. These include the terms and conditions of the credit, such as the interest rate, payment schedule, and the maximum credit limit. It also outlines the responsibilities of both parties, including the borrower's obligation to make timely repayments and the lender's commitment to provide the agreed-upon credit amount.
Credit arrangements can vary in nature and complexity. They can range from simple credit card agreements, where individuals can access a predetermined credit limit for making purchases and are required to repay the outstanding balance each month, to more complex commercial credit arrangements between businesses. In commercial credit arrangements, businesses may negotiate specific terms such as the time period for repayment, collateral requirements, and the purpose for which the credit will be utilized.
Overall, credit arrangements serve as crucial tools to facilitate the flow of funds and finance various activities. They enable individuals and businesses to access capital when needed, providing a flexible and convenient solution for managing financial obligations and supporting economic growth.
Common Misspellings for CREDIT ARRANGEMENT
- xredit arrangement
- vredit arrangement
- fredit arrangement
- dredit arrangement
- ceedit arrangement
- cdedit arrangement
- cfedit arrangement
- ctedit arrangement
- c5edit arrangement
- c4edit arrangement
- crwdit arrangement
- crsdit arrangement
- crddit arrangement
- crrdit arrangement
- cr4dit arrangement
- cr3dit arrangement
- cresit arrangement
- crexit arrangement
- crecit arrangement
- crefit arrangement
Etymology of CREDIT ARRANGEMENT
The word "credit" originates from the Latin word "creditum" which means "something entrusted to another person" or "loan, trust". It is derived from the verb "credere" which means "to believe, entrust".
The word "arrangement" comes from the Old French word "arengement" which means "to arrange, settle". It is derived from the verb "arranger" which means "to set in order".
When the terms "credit" and "arrangement" are combined, "credit arrangement" refers to a formal agreement or understanding between a lender and a borrower regarding the extension of credit, repayment terms, and other conditions.
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