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7 November, 13:32

A loan's principal contains the assets you promise to give the bank if you do not repay a loan as agreed.

True or false?

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Answers (1)
  1. 7 November, 16:28
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    The statement is: False.

    Explanation:

    For banks, the principal refers to the amount due on a loan and it is used to calculate interest payments. In other words, it represents the amount of money individuals borrow. The assets individuals promise to give to banks if they cannot repay a loan is called collateral and they include houses, vehicles, investment accounts or any other valuable object.
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