Closed-End Credit
Closed-end credit refers to a loan or credit agreement in which the borrower is given a specific amount of money upfront and agrees to repay it over a predetermined period of time, typically in fixed instalments. Payments are usually of equal amounts.
Closed-end credit is a type of loan that you only take out once, such as an instalment loan. After you repay your balance, you can’t use the credit or loan again. You’ll have to apply for new credit if you need to borrow again.
Mortgage, automobile, and student loans are examples of closed-end credit. An agreement, or contract, lists the repayment terms, such as the number of payments, the payment amount, and how much the credit will cost.
Two Types of Credit: Closed- and Open-End (2024). Tax Guide. URL: http://www.a-ccpa.com/content/taxguide/text/c10s10d110.php
Irby, L. (2021, September 21). How Closed-End Credit Is Paid Off. The Balance. URL: https://www.thebalancemoney.com/what-is-closed-end-credit-4164396