What are the terms of credit? How it may vary for person to person?

1. Every loan agreement specifies an interest rate which the borrower must pay to the lender along with repayment of the principal.
2. In addition, lender may demand collateral, i.e., as assert that the borrower owns and uses this as a guarantee until the loan is repaid.
3. .If the borrower fails to repay the loan, the lender has the right to sell the collateral to obtain payment.
4. Terms of credit comprise interest rate, collateral and documentation requirement, and the mode of repayment.

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