What is the difference betwwen Letter of Credit and Letter of Guarantee ??

What is the difference betwwen Letter of Credit and Letter of Guarantee ??

Originally, a Letter of Credit (LC) be quite literally that



- a memo addressed by the buyer's dune to the seller's bank stating that they could vouch for their right customer, the buyer, and that they would pay the peddler in bag of the buyer's default.



A epistle of guarantee is usually issued to confirm that a stock or property is indeed owned by the seller & will be deliver upon closure of the deal.



Source:

http://financial-dictionary.thefreedicti...



regard,

Philip T
A letter from a ridge guaranteeing that a buyer's payment to a merchant will be received on time and for the correct amount. In the event that the buyer is incompetent to make fee on the purchase, the bank will be required to cover the full or remaining amount of the purchase.



Letters of credit:::::

Letters of credit are commonly used in international transactions to ensure that gift will be received. Due to the nature of international business including factors such as distance, adjectives laws contained by each country and difficulty within knowing each do personally, the use of post of credit has become a vastly important aspect of international trade. The edge also acts on behalf of the buyer (holder of memorandum of credit) by ensuring that the supplier will not be rewarded until the bank receive a confirmation that the goods enjoy been shipped.
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