Credit situations

Q. A farmer took a loan for agriculture, but unfortunately could not repay the loan. So, the farmer took another loan to repay the previous loan. What is this condition called?

1. Debt cycle
2. Debt trap
3. Debt load
4. Debt of debt

Q. When people are unable to repay a loan, they take another loan to repay the orignal loan. This vicious cycle is known as ___________.

1. poverty
2. loan cycle
3. debt trap
4. debt cycle

Q. Keerthi is a farmer who has taken an agricultural loan. When is she expected to repay the loan?

1. By the end of the year
2. At the time of seeding
3. Every month in instalments
4. After the harvest

Q. Identify the situations that do not involve credit.

1. Manish avails an education loan.
2. Maria avails a scholarship.
3. Kiran is gifted a popcorn maker.
4. Sagar buys a mobile phone on instalment.

Q. ______ is a situation where you are forced to take a fresh loan to repay your existing loan.

1. Safe loan
2. Debt trap
3. Secure loan
4. Cycle loan

Q. How is borrowing from a moneylender different than borrowing from banks?

1. Moneylenders charge a higher interest rate.
2. Banks charge a higher interest rate.
3. Moneylenders require a collateral.
4. Banks require a collateral.

Q. Joel needs a loan of ₹1, 00, 000, which he can repay it within a year. Suggest a suitable source of credit.

1. A loan from the local moneylender at 15% per annum.
2. A loan from the bank at 15% per annum.
3. A loan from the local moneylender at 13% per annum.
4. A loan from the bank at 25% per annum.