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Read the scenario. Marc just turned 16 and is looking to purchase a vehicle. The bank will grant him a loan under the condition that he opens a checking account and has the monthly payment debited directly from his account. Why would the bank grant Marc the loan under these specific conditions?

User DaGrevis
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Answer: To ensure that Marc does not default in the payment of loan.

Step-by-step explanation:

Checking account means the account in which withdrawals and deposits can be made. Checking accounts an also be student accounts which helps to access cash easily. Checking accounts charge minimum fees, overdraft fees and ATM fees. Checking account has an overdraft facility so even if Marc fails the payment of interest it would be deducted from his account directly.

On giving loans under these conditions the bank protects itself from receiving monthly payments on regular basis without any default. Marc is 16 year old without any regular income which increases the risk of offering loan to him as he might default payment without income.

User Ed Fine
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