Question
4. A legally binding agreement between a borrower and lender is called a: A) Contract B) Collateral C) Credit report D) Finance charge
Ask by Reyes Kelley. in the United States
Feb 03,2025
Real Tutor Solution
Tutor-Verified Answer
Answer
A legally binding agreement between a borrower and lender is called a **Contract**.
Solution
The correct answer is:
A) Contract
A legally binding agreement between a borrower and lender is referred to as a contract. This document outlines the terms and conditions of the loan, including the amount borrowed, interest rates, repayment schedule, and any other relevant details.
Reviewed and approved by the UpStudy tutoring team
Like
error msg
Explain 
Simplify this solution The Deep Dive
When you think of borrowing money, imagine a handshake that turns into a formal text: that’s your loan contract! It outlines the dos and don'ts, protecting both the borrower and the lender, and ensuring everyone knows what’s expected. Now, let’s talk about what makes these contracts legal! They must include essential elements, like mutual consent and an exchange of value. Forgetting these can make agreements as shaky as a house of cards. Always read the fine print—and maybe even have a lawyer take a look!
