What is the dollar amount that a lender makes available to the borrower, which may or may not be borrowed?

What is the dollar amount that a lender makes available to the borrower, which may or may not be borrowed?

• A. Income
• B. Checking Account
• C. Income Tax
• D. Line Of Credit

Answer: (D)

Line of credit is the maximum amount a lender makes available to a borrower that can be drawn upon as needed. This amount may be borrowed in whole or in part, or not borrowed at all, and interest is charged only on what is actually used. This differs from income (money you earn) and a checking account (funds you already have on hand for transactions), and from income tax (a tax obligation rather than a borrowing facility). So the concept described is the line of credit.

Line of credit is the maximum amount a lender makes available to a borrower that can be drawn upon as needed. This amount may be borrowed in whole or in part, or not borrowed at all, and interest is charged only on what is actually used. This differs from income (money you earn) and a checking account (funds you already have on hand for transactions), and from income tax (a tax obligation rather than a borrowing facility). So the concept described is the line of credit.