All this implies that the mortgage loan has lost its appeal and its popularity has been displaced by other means or credits, such as consumer credit . However, the recent and growing recovery of the economy has once again put interest in mortgage credit , even though the costs of the mortgages granted before the crisis have not yet been covered.
From Ramsay family Unpaid today we will reveal the answer of what the credit is , we will explain the different types of credits that exist and we will guide you, in case you need to ask for one, you have lent money that has not been returned to you or you are a victim of other financial aspects Like the ground clause.
What is the credit?
To understand the concept of credit, we must start by defining what credit is. The credit is characterized as a financial procedure in which we receive a certain monetary amount, for a certain time and up to a set limit.
Generally, loans are usually granted by financial institutions in accordance with stipulated and agreed clauses. Although there are other types of credits that we will mention later. To dispose of that money, commissions subject to interest on the capital we use must be paid.
Once the loan has been finalized and after its termination period, an extension or renewal can be negotiated again.
That is, the purpose of a loan is to cover expenses in specific situations where there is a lack of liquidity. Normally, it involves the creation of a checking account and a credit card .
Credit accounts are all those bank accounts in which an amount of capital is available, previously agreed with the financial entity. This sum of money will be available to carry with the expenses that we have agreed upon. The most common is to pay annual fees for maintaining it.
Credit cards arise after the need to facilitate payments to consumers. It is a line of credit, which allows the holder to make purchases or withdraw cash from an ATM or bank branch. Among the advantages, we reflect that they can be used worldwide. In this way, we will have money, even without being in cash from the local currency. In addition, it allows flexibility when making purchases, since they can be paid at the beginning or end of the month, as well as split payments.
Depending on the conditions of the contract subject to the credit card we acquire, we can find several types of credit cards , such as classic, silver, gold etc. Support interest is usually charged, as is the credit account .
What is a loan?
According to article 1740 of the civil code , the loan consists of a contract whereby the bank identity makes available to us the amount of money agreed upon. In this case, the money lent to us must be returned during the agreed time period, in addition to paying the corresponding interest and commissions. The most usual is to return that amount in monthly installments to make it more enjoyable.
Differences between credit and loan
It is likely that the vast majority of us do not know how to differentiate between a loan and a loan. In fact, it is usual for both terms to be confused, even if they are believed to have the same meaning. Actually, these are two very different concepts. Those with financial knowledge may know what I mean. We can differentiate them more easily knowing the following characteristics:
- The loan is usually used to acquire assets of a large sum of money, such as a vehicle or a home. They tend to have a long duration and the most normal thing is to know exactly the price. On the other hand, the credit is usually used on specific occasions, when it is necessary to have an amount of money at a precise moment. The latter is the most used by freelancers and businessmen, who need liquidity without being knowledgeable about the amount they will need.
- Normally loans are usually personal, therefore, guarantees or collateral (such as the mortgage) will be required as a backup. In loans , however, no guarantee is generally required, since interest is paid based on the capital spent.
- When a loan is terminated, a renewal is not allowed, so a new loan agreement will have to be initiated. The credit , in contrast, can be extended and renewed as many times as appropriate, as long as it is within the maximum available.