Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The discount rate may have specific definitions like the interest rate that is applicable for any lending by the federal or national reserve/bank to the commercial banks and other lenders/financial institutions in case of short-term borrowings/debt. It also means the rate of interest that is used for the DCF or discounted cash flow evaluation/analysis with an aim towards working out the current value of cash flows in the future.
This means the rate of return in many ways, i.e. a way of discounting cash flows in the future right back to their value in the present. The biggest applicability in the real estate sector is the impact on retail loan interest rates for buying property (home loan). The discount rate may influence the retail lending rates of financial institutions. The discount rate is also a metric in the real estate sector, which indicates the return rate required for any commercial property investment. It is a vital input in terms of analyzing discounted cash flows as well, helping work out the fair selling price for any real estate unit or property.
