Definition
The terms of repayment are the conditions by which a debtor must satisfy a financial obligation.
Analysis
Terms of repayment vary by creditor as well as by the type of account. These terms will be documented in the written contract or the cardholder agreement. In the case of credit card accounts, the terms can be changed by the card issuer at any time for any reason as long as they provide you with advance notice and a chance to opt out of the changes.
Terms of repayment include:
- frequency of payments
- amount of payments
- usage restrictions on the account
- user responsibilities
- payment deadlines
- location of and means of repayment
A debtor is responsible for adhering to the terms of repayment that are established by the lender. Failure to follow the terms could jeopardize the status of the account and could damage the credit rating of the debtor.
