When someone pays back a loan quickly, it is known as sudden debt pay off.
Further Explanation:
Debt:
Debt is the amount the individual was taken from the private bank, government bank and any other institutions to meet the financial needs. The individual, corporations and the institutions taken the loan from the market after putting the collateral security.
Collateral security:
Collateral can be defined as the asset or property that can be accepted as loan security by the lender. The bank and financial institution require collateral property while giving loans because in case a borrower defaults loan payments then the financial institution or bank can seize the property to realize its losses. The loans that require collateral security are termed as a secured loan. The rate of interest is low in comparison to the unsecured loans.
When someone pays back a loan quickly before the repayment period, that is known as sudden debt pay off. Pay off means the payer pays the money back to the lender.
When someone does not pay back a loan before the repayment period, that is known as a defaulter.
Sudden payoff debt increases the money supply in the market.
Learn more:
1. Learn more about lifetime cost
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2. Learn more about loan type
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3. Learn more about collateral security
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Answer details:
Grade: Middle School
Subject: Banking
Chapter: Money and banking
Keywords: call, when someone, pays back, a loan, quick, sudden pay off debt, money supply, repayment period, defaulter, borrower, bank, financial institutions, collateral security.
