Question
Banking And Insurance Question on Loans
In case of Cash Credit, interest is charged on _____ loan availed.
A
actual
B
sanctioned
C
0.5
D
0.8
Answer
actual
Explanation
Solution
In Cash Credit, the interest is charged only on the amount that is actually utilized or withdrawn by the borrower, not on the total sanctioned amount. This makes Cash Credit cost-effective for businesses.