Which expense is a bank least likely to extend a line of credit for?

Question

Computers and Technology

Roy

10 July, 23:28

Which expense is a bank least likely to extend a line of credit for?

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Answers (2)

Know the Answer?

Flores · Answer 1

The answer would be:

A flat-screen TV.

Humberto Hale · Answer 2

A bank is least likely to extend a line of credit for purchasing a flat-screen TV.

Explanation:

Generally, banks finance people through loans, which are granted so that people can undertake economic, labor, consumer or housing projects. Thus, for example, mortgage loans are granted for people to buy their first home.

In general, banks usually approve credits that imply an expense that, later, represents an income for the person or, at least, avoids future spending (for example, credits to start a business or to buy a house, which would avoid the future payment of a rent). However, when it comes to primary consumer goods (consumer goods that do not grant any competitive advantage to the person who buys it) the banks are reluctant to lend this money, unless the person has a sufficiently high credit score as to guarantee the operation.