A loan, as a rule, presupposes a relationship between two participants in a transaction, one of which acts as a lender, the other as a borrower. The main types of credit can be provided, both in monetary terms, and in the form of tangible assets (natural funds). According to the terms of the loan, one participant in the transaction (the creditor) provides borrowed funds or valuables to another participant (the borrower) for a certain period of time.
The fact of the loan is fixed in the loan agreement with the terms and terms of its repayment, guarantees of security and conditions of payment. Compliance with the contractual maturities is mandatory for the borrower.
Issuance of the main types of loans is carried out on the condition of their security, that is, the borrower gives a guarantee to the lender for the return of borrowed funds received for temporary use. As a guarantee, the borrower lends any property as collateral.
Lending is carried out on a paid basis, that is, the borrower in the return of the principal amount of borrowed funds to the creditor, additionally pays a certain percentage for the use of these funds.
Despite a wide variety of different forms of loan, the market is constantly replenished with new credit products with different terms of their issuance and repayment. In addition, loans are provided not only by banking institutions, but also by other financial organizations from among credit unions and other companies.
Depending on the maturity, the main types of credit are divided into short, medium and long term. Loans issued for a period of up to one year are classified as short-term, for a period of one to three years - to the medium-term category, for longer than three years - long-term. For the period of issuance of the loan, the bank takes all risks on its own, therefore the interest rate for the use of financial resources is directly dependent on the term of the loan.
Depending on the principle of security, distinguish the main types of credit - secured and without collateral. Loans issued on the security of property or under a guarantee for a third-party borrower are classified as secured. Loans issued without such collateral guarantees are characterized by much smaller loan amounts and more stringent conditions, which are dictated by an increased risk of non-return.
Depending on the scheme of debt repayment, loans are divided into differentiated and annuity loans. With the first option, repayment is made monthly by decreasing payments, at the second - by equal amounts throughout the loan term.
In addition, along with the main types of loans, there are loans, repayment of which is carried out in full (with accrued interest for its use) at the end of the term or providing for repayment under individual schemes and schedules. All these conditions are fixed by the loan agreement.
A very extensive classification of the main types of loans for the intended purpose. They are issued for the purchase of cars, real estate, small and large household appliances, payment for tourist services and permits, payment for education, etc. Consumer loans are widely spread, which are taken for urgent needs.
Loans are given in currency (national and foreign), in the form of goods and in cash (credit cards). For each such loan there are certain conditions that differ in terms of issuance, down payment, collateral and interest rate.
Loans and interest rates differ, which can be fixed and floating. In most cases, banks apply fixed rates, and only in certain economic situations resort to a change in interest accrual.
Posted on June 11, 2018 at 01:59 PM