To extend credit means to provide a loan or enter into an agreement that allows for the deferral of payment on a debt. This can apply to both acknowledged and disputed debts, regardless of their validity. Essentially, it involves agreeing to lend money or allowing someone to delay repayment of what they owe.
The term "extend credit" is commonly used in various legal contexts, particularly in finance and contract law. It is relevant in situations involving:
Users can manage credit-related agreements using legal templates from US Legal Forms, which are drafted by qualified attorneys to ensure compliance with applicable laws.
Here are a couple of examples of abatement:
Example 1: A bank extends credit to a customer by approving a loan for $10,000 to be repaid over five years with monthly payments.
Example 2: A furniture store allows a customer to purchase a sofa on credit, deferring payment for six months (hypothetical example).
The definition of extending credit is influenced by various federal and state laws, including:
These laws regulate how credit is extended and the information that must be provided to consumers.
Examples of state differences (not exhaustive):
| State | Credit Extension Regulations |
|---|---|
| California | Requires specific disclosures when extending credit. |
| Texas | Has laws governing interest rates and fees for credit extensions. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition |
|---|---|
| Loan | A sum of money borrowed that is expected to be paid back with interest. |
| Credit | The ability to borrow money or access goods or services with the understanding that payment will be made later. |
If you are considering extending credit or have been offered credit, follow these steps:
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It means to provide a loan or allow someone to delay payment on a debt.