Which type of credit requires repayment in a lump sum after a short period, possibly with interest?

• A. Installment Credit
• B. Non installment credit
• C. Revolving credit
• D. Single-payment credit

Answer: (A)

The key idea here is how the loan is repaid. A loan that must be paid back in one lump sum after a short period, with interest if charged, is described as a single-payment loan. There aren’t scheduled installments—everything is due at once when the term ends. That’s why this option fits best.

By contrast, installment credit involves paying back the borrowed amount through a series of regular payments over time, with both principal and interest included in each payment. Revolving credit is open-ended and allows ongoing borrowing up to a limit with payments that can vary. Some texts call single-payment loans noninstallment credit, but the essential point remains: one lump-sum repayment, not multiple installments.