Posted by: IrfanUpdated at : 5:06 AM
Tags: LOANS
The need for money to finance some activities, from buying a House to a trip, is a matter that is the order of the day. Some of the metho...
The need for money to finance some activities, from buying a House to a trip, is a matter that is the order of the day. Some of the methods to get the necessary money are using the request for loans and credits. In principle appear to be two ways quite similar, but in practice they are not so. At here we give you the keys so you know the difference between a loan and a credit, and the ability to choose which best suits your needs.
What is a loan and what distinguishes it?
In general, both are mostly used in everyday life, without being one of them predominantly on the other. We will start giving some details about what is a loan.
A loan is a type of transaction in which one entity or person lends money (called lender) to another entity or person (called borrower). This amount is fixed and is determined at the beginning of the contract and how the time in which that amount should be reinstated to the lender.
Also in the contract will be determined the form of return of any amount, (monthly, quarterly, yearly, etc) as well as the amount and nature of the interest that will be paid. With this we understand it may be a fixed interest rate (the same during the entire return) or variable (according to a determined reference index).
I.e., on a loan at the same time who is hired, we already know and return periods, as well as all the money you have and all that we must return. The money is received immediately.
What is a loan and what distinguishes it?
In general, both are mostly used in everyday life, without being one of them predominantly on the other. We will start giving some details about what is a loan.
A loan is a type of transaction in which one entity or person lends money (called lender) to another entity or person (called borrower). This amount is fixed and is determined at the beginning of the contract and how the time in which that amount should be reinstated to the lender.
Also in the contract will be determined the form of return of any amount, (monthly, quarterly, yearly, etc) as well as the amount and nature of the interest that will be paid. With this we understand it may be a fixed interest rate (the same during the entire return) or variable (according to a determined reference index).
I.e., on a loan at the same time who is hired, we already know and return periods, as well as all the money you have and all that we must return. The money is received immediately.
What is a credit and what distinguishes it?
When we ask a credit, we request that you put at our disposal a limited amount of money that we can use when we need. I.e., do not receive an immediate amount of money at the time we ask the credit, if not that can have such amount of money, for a period of time. We can therefore make use of it in a variable manner according to our needs.
In this way, we only pay interest on that amount of money that we have used. Anyway, we have to pay another amount of interest (usually quite minor) for the simple fact of having a credit. This is because the entity that gives us credit, must maintain an availability of money equivalent to the amount of the loan requested, and that has a cost.
In the same way that in the loan, at the time that we closed the contract must determine how and with what interests it will hold the return of the amount of credit that we use.
When is usually to use each one?
Therefore, according to the needs that we have (a fixed amount of money or a variable amount) will consider requesting a credit or a loan. Generally, loan is commonly used for expenses considerably high and fixed, such as buying a house or a car, and credit for more specific moments in which we need a money which we do not have.
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Title : Difference Between Loan and Credit
Description : The need for money to finance some activities, from buying a House to a trip, is a matter that is the order of the day. Some of the metho...
Description : The need for money to finance some activities, from buying a House to a trip, is a matter that is the order of the day. Some of the metho...