Management and Organizational Studies 2275A/B Chapter Notes - Chapter 26: Consumer Debt, Subrogation, Accounts Receivable
12 Dec 2016
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Chapter 26 the legal aspects of credit. Credit is a contractual relationship: the lender agrees to lend money in exchange for a promise by the borrower to repay the loan, usually with interest and within a period of time. Unsecured credit means that the creditor has only a contractual right to receive payment from the debtor: no interest in property, if they don"t pay you sucks. If someone is borrowing a large amount of money, the credit arrangements tend to be more formal and provide more security to the lender: usually to fund a major asset or expansion of business, often secured credit. If the borrower and lender are able to agree on terms of the loan, they will enter into a credit or loan agreement: terms are negotiated by the parties themselves. With small debt financing, terms are informal and both written and/or verbal. With large debt financing, the credit agreement is typically a loan agreement.
