This is a loan term or an arrangement that modifies a loan term under which a bank agrees to cancel all or part of a customer's loan obligation on the occurrence of a specified event. It may be included as a part of the loan documents, or it may be a separate agreement. What is it?
Click on the arrows to vote for the correct answer
A. B. C. D.C
The term "CRCM" is not a known term in banking or finance. However, based on the context and the provided options, it seems that the intended term is "Debt cancellation contract (DCC)."
A Debt Cancellation Contract (DCC) is an agreement between a borrower and a lender, usually a bank, under which the lender agrees to cancel all or part of the borrower's loan obligation on the occurrence of a specified event, such as death, disability, or job loss. DCC is also known as "Debt cancellation agreement" (DCA) or "Loan cancellation agreement" (LCA).
The purpose of a DCC is to provide relief to borrowers who may not be able to repay their loans due to unforeseen circumstances, such as a sudden illness, accident, or job loss. By signing a DCC, the borrower can avoid defaulting on the loan and damaging their credit score. The lender benefits from a DCC as it reduces the risk of loan default and helps to maintain a good relationship with the borrower.
A DCC can be included as a part of the loan documents or as a separate agreement. The terms and conditions of a DCC may vary depending on the lender's policies and the borrower's circumstances. In some cases, the borrower may have to pay an additional fee to opt for a DCC. The lender may also impose certain restrictions or exclusions, such as limiting the amount of debt that can be canceled or excluding certain types of loans.
The other options provided in the question, such as "Debt suspension agreement (DSA)" and "ALLL," are not relevant to the definition of a DCC. A Debt Suspension Agreement (DSA) is an agreement between a borrower and a lender that allows the borrower to temporarily suspend their loan payments for a certain period, usually due to financial hardship. The Allowance for Loan and Lease Losses (ALLL) is a reserve account that banks maintain to cover potential losses from bad loans. Anti-dying is not a known term in banking or finance.