Closed-end credit is a loan for a specific amount that must be repaid in full by a stated due date. Which option matches this definition?

• A. A mortgage loan
• B. A loan for a specific amount that must be repaid in full by a stated due date
• C. Credit extended in advance up to a limit
• D. Payday loan

Answer: (B)

Closed-end credit is a loan with a fixed amount that you repay in full by a specific due date, rather than borrowing repeatedly against a limit. This exact description is captured by the option that states a loan for a specific amount that must be repaid in full by a stated due date. It embodies the defining feature: a set loan amount and a definite payoff date, with no ongoing borrowing under the same agreement. Mortgages are a common example of closed-end credit, illustrating how the concept works in practice, while the other options describe revolving or different loan structures that don’t match the fixed-amount, fixed-due-date idea as precisely.