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Credit instruments are financial tools that facilitate borrowing and lending, characterized by key features such as a defined principal amount, an interest rate, and a repayment schedule. They typically involve a borrower receiving funds from a lender with an obligation to repay the principal along with interest over a specified period. Additionally, credit instruments can vary in risk and duration, and may be secured or unsecured based on collateral. Common examples include loans, bonds, and credit cards.

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