MCS 3040 Chapter Notes - Chapter 25: Payment Protection Insurance, Security Interest, Consumer Protection

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 3040
• Professor: Joseph Radocchia

Document Summary

Credit arrangements outside normal business activities tend to be more formal and provide more security to the lender. A lender usually wants collateral to bay up promise to pay. A lender will carefully review borrowers assets in terms of current value. If the creditor approves the loan, the resulting agreement is a credit agreement (contract) The lender agrees to lend money based on the terms of the agreement which will require borrower to repay the money on a specified schedule and provide security in event of default. Default: failure to may payments on the loan. If a debtor defaults, creditor can take action to have assets seized and sold to satisfy unpaid debts. As extra security a lender may also seek assurance from a person other than the one borrowing. Collateral: security of a borrowers promise to repay a loan. Consumer debt: a loan to an individual for a non-commercial purpose.