Banks today offer many different loan programs. Loans can be given to support small businesses and for other purposes. Nowadays most people have a bank loan. The types of loans that are most popular among the population: mortgage loans, consumer loans, auto loans, and credit cards.
The most expensive loans
The most expensive loans are believed to be both consumers and credit cards. This is due to the fact that the commission for them is often overpriced and can generally be up to 50% per year.
However, the most expensive loan is a mortgage. Overpayment will be in the hundreds and even millions of dollars. Despite these circumstances, there are many who want to take out such a bank loan. Types of loans are explained in more detail below.
The most popular among the population. It is often used for the purchase of large household appliances: refrigerator, television, washing machine, etc. Thanks to it, you can also pay for services at other companies, e.g. B. Buy a ticket for a travel agency.
The loan terms range from several months to a year. It is divided into two categories: target credit and non-target credit. For example, a customer has to buy a refrigerator. He comes into the store, selects the goods he needs, and the bank that gives him a target loan.
The second type of loan is granted by the bank itself. The customer draws up a contract, takes the necessary amount and spends money at his own discretion. The borrower then pays the specified amount to the bank each month.
Mortgage loans issued for the acquisition of real estate. Acquired apartments can be secondary or located in new buildings. A loan repayment guarantee is the purchase of housing or other property from the borrower. The bank that offers this service has to make a deposit of 10% of the total amount. In addition, the borrower must ensure the property acquired and his own health. All financial costs are borne by the borrower. The mortgages have a term of 10 to 30 years.
A car loan is issued to buy a new one or a used car. In this case, the borrower must ensure his own health and his own car under the CASCO program. Loan terms – several months or longer.
A credit card is a very convenient payment system and is very popular with many people. She can pay for in-store purchases. Transfer money to this card. The advantage of a credit card is that you can make purchases without funds. But there is also a significant disadvantage – this is a very high-interest rate. In the event of a delay in payment, severe contractual penalties will apply.
In this case, a certain amount is given when mortgaging real estate, such as a car. The main disadvantage of such a loan is the short repayment period.
Small business credit
Trade credits are a direct exchange between two organizations. The first organization gives money and the second one a product or service for them. Such a loan is the best option for financial support for small businesses.
Small business loans are most often at the expense of a commercial loan. This type of loan does not apply to bank classic loans. Such a loan can be issued between commercial organizations. The essence of the loan is that one organization gives money to another organization for a product or service while both parties sign an agreement and an agreement.
For example, one company sells another 20 tons of metal to another. The cost of a ton is 4000 dollars. According to the terms of the contract, repayment will be made 7 months after the transaction is completed. In the event of a delay, the organization that received the loan must pay an additional 5% of the monthly amount of metal sold.
Commercial loan functions
The creditor may not only be a buyer, but also a seller. In the first case, the buyer pays a certain amount of money for a commercial loan. This is a prepayment for a specific product or service. If the seller acts as a creditor, the period for which the buyer is obliged to repay the debt is calculated when a loan is issued. It is also possible to repay the loan in installments. In this case, however, the interest rate is given.
The main advantage of a commercial loan is a percentage that is much lower than that of traditional banks. The advantages include the fact that a commercial loan is the satisfaction of the needs of two parties at the same time. The buyer has the opportunity to buy exactly the goods for which he cannot pay immediately.
And the seller will fill up the customer base. It should be noted that the interest rate is already included in the price of the goods. An organization can offer and receive loans. This fact makes it possible to save financial costs considerably. For this reason, lending to small businesses is carried out on very favorable terms.
The main disadvantages are the limited inventory of the seller. To increase their capabilities, companies often use checks and invoices when calculating. There is also a certain risk that the buyer will simply go bankrupt and fail to repay the loan on time. A major disadvantage is the short loan term. However, some organizations may offer deferred payment to their customers.
As far as the interest rate is concerned, this is the case for each buyer. If the agreement states that the lender provides things to the borrower rather than cash, the interest rate is excluded. If the borrower violates the loan agreement, he is obliged to pay a fine.
The amount of the fine is also calculated individually. If the contract does not provide a fixed interest rate, the refinancing rate will be used. If the borrower does not want to agree on the interest rate, he can take out a similar loan from a commercial bank.