The Bank credits considered the most traditional financial tools of banking entities have had some changes in recent years, learn everything related to this topic by reading the following article.
Bank loans allow consolidating the well-being of society
Bank credits
They are called all those loan processes carried out by a financial institution in order to grant amounts of money and cash to institutions, organizations and people. The purpose is to obtain benefits in the short and medium term in order to offer a solution to the financial problems of the interested parties.
La definition of bank credit It comes from the Latin “credere” which derives from an expression that means “take it for granted”, it is a very old procedure that has been adapting to the needs and changes of society itself.
Bank loans are granted under certain conditions that allow their return. It is a type of reimbursement that the applicant must make by canceling a series of interests and fulfilling some conditions.
In the following article Requirements to open a business it is possible to appreciate the way in which alternatives can be obtained for the acquisition of resources.
How are they obtained?
It consists of a process where a person organizes a financial institution in this case a bank. The amount of money in which he can help you solve an economic situation, acquire goods or start a business. The entity proceeds to request some guarantee and support requirements.
After analyzing the requirements, the bank decides whether to grant the total amount of money, assign a part of what is requested or simply deny it. In any of the three conditions, it is always the bank that decides to carry out the procedure.
In the event that the credit has been assigned partially or totally, payment conditions are established, where the client must make monthly payments. It includes payment conditions in which interest is determined as well as some commissions for operating services.
All the management, control and monitoring of the credit is carried out by the financial institution. The types of bank loans They allow, among other things, to increase the capital of the banks since the interests sometimes end up being greater than the amount of the credit itself.
These situations have been regulated for many years in all the countries of the world, to prevent banking institutions from committing the crime of usury.
Features
It is necessary to be solvent with respect to credit cards or other accounts related to the client in banking institutions.
- They allow people and institutions to solve immediate economic problems.
- They obtain loan benefits thanks to the interest charged on them.
- The conditions are established by the banking entities, depending on the regulations established in each country.
- They can be of different shapes and types that allow customers to choose to purchase housing, vehicles, house and apartment renovations, for entrepreneurs, agricultural activities, in short, to serve various social areas.
types of credit
Today activities of any kind in a country require the injection of resources, in this sense money is an important part to carry out business start-up projects, acquisition of goods, bank loans for companies, promote agricultural projects.
Personal loans are those that are delivered to people, who can request them for different purposes (take a trip, remodel the house or organize a wedding, for example).
Tarjetas de crédito
It is one of the types of financial tools most used by clients, it represents a type of financing that helps to obtain resources to start businesses, acquire goods and services or solve economic problems.
It is characterized by its temporary nature, that is, it allows you to have money that you do not have at the moment but that will be received in the immediate future. It is made up of various loan mechanisms that are usually paid in monthly installments together with the commission for using the card itself.
In the same way, they generate a monthly fee for service expenses or operations, which must be paid compulsorily, even if they are not used.
In the following article How to Manage a Credit Card? You will be able to know better how this financial instrument is used.
Personal credits
It is a form of bank loan where an amount of money is awarded to the personal account of the applicant, the bank at no time inquires what it will be used for since it is not in their interest. For this reason, these credits have limited amounts and according to their ability to pay.
They are established based on the credit and payment capacity of the applicant, the payment interests are a little lower than other types of credit. On the other hand, it is important to consider that the application does not directly assign the credit, but rather, like other financial mechanisms, certain requirements must be met.
In many countries they are called open credits since the applicant does not specify what they will be used for. As a recommendation, it is important that the client knows and reads the credit conditions well, because each banking institution has totally different conditions.
special credits
In this line, various types of credit are grouped, such as mortgages, for the acquisition of goods, tourism and education, each one has different characteristics since they are granted in order to finance various activities, let's see.
Mortgage
They consist of loans for the purchase of homes, their remodeling or simply the release of another mortgage. They are instruments that help many people to obtain assets immediately and that must be paid within a set period of time.
This type of credit has totally different conditions than personal ones. The requirements are very demanding since the loan amounts are large and they also require guarantees for their granting. Worldwide there are various ways of granting mortgage loans according to the characteristics of each country.
The requested credits must be verified and demonstrate what they are going to be invested for, whether for the purchase of a home, acquisition of a vehicle or some other good: in the same way they are used to remodel homes The non-demonstration of the use of the credit for the requested purposes allows the bank through certain legal mechanisms to annul it.
Educational
They are part of the development policy of many financial entities that seek to promote university studies through loans. They are awarded to student representatives or the students themselves who agree to cancel said debt over a period of time.
These credits are even separated by various types of guarantees, where some banking entities seek to absorb recently graduated students into employment, in order to guarantee the return on investment.
To learn more about this topic, we recommend the article What is Corfo credit?where aspects related to this topic are described.
Tourist
This type of credit has grown a lot in recent years and is used mostly by elderly people, who place their pension fund as collateral. However, some countries try to apply regulations to prevent people from consuming their savings in this type of credit.
Agricultural
They are all those loans intended for agro-industrial development, they focus on the various agricultural areas that can increase the production of various items. They also stimulate the processes for the development of companies dedicated to the production of food and the application of projects of this type.
payroll credits
Nominal loans, as they are also called, are similar to personal loans and consist of receiving the salary amount in a bank account, so the entity grants the amount according to the worker's salary.
These types of accounts are used to meet the guarantee requirements when a personal and mortgage loan is requested. The bank takes as an instrument and makes the deduction of credit payments in those accounts. It is a strategy of banking institutions to guarantee their loans.
Advantages
Among the advantages we can mention that they allow access to amounts of money or purchase of items immediately, without the need to have those amounts in the accounts. Likewise, it allows promoting the credit policy to seek personal and family well-being.
On the other hand, it is possible to access resources that could otherwise be obtained, so that the credits help the growth of people and the incentive for new entrepreneurs; which allows them to be considered as necessary in all activities of today's society.
Disadvantages
The obligation to pay installments for a certain time is created, in the same way the possibilities of flexibility in some countries do not exist, which can cause some people to lose the goods acquired if they do not pay the installments on time.
The conditions are established by the bank according to its needs, thus being unilateral and the clients must accept them in an unrestricted manner. Likewise, indebtedness is always present and must be consistent with payment to avoid sanctions.
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