Types of loans and their features. Essence of credit
Credit relations is an integral part of a market economy, which in a simplified version can be represented as a process of buying and selling money. The essence of lending lies in the movement of free Money from the lender to the borrower on the terms of mandatory repayment, limited period of use of funds in time and payment, that is, the accrual of interest in favor of the lender. IN market economy There are many types of credit relations that fall under the definition financial services- leasing, banking, factoring, loans, micro-credits and much more.
Types of public lending
A state loan is a loan that is provided to the borrower at the expense of budgetary funds. The function of the creditor in public lending is assumed by local authorities of various levels, or government bodies. Also, the category "state loan" may include loans issued by a commercial bank, but subsidized by the state on favorable terms - for example, youth loans, mortgage loans for families with a certain number of children, preferential car loans. issued by the Central state bank are most often used for the following purposes:
- Lending to commercial banks;
- Lending to certain regions or industries for which budgetary funds have been exhausted and there is no way to get a loan from a commercial bank;
- Lending to international relations programs.
Types of long-term lending
Long-term loans are large loans issued for a period of more than 5 years. Such loans may have both a fixed interest rate, and the rollover rate, which varies depending on market fluctuations. The following target types of long-term loans are distinguished:
- Investment business loans commercial organizations to purchase expensive machinery and equipment or replenish assets;
- Communal loans for the construction of important state facilities;
- International credits and interbank loans.
Individuals can also borrow money for a period of more than 5 years. The most common types of long-term lending to individuals include the following long-term loans:
- for the purchase of transport;
- Mortgage and land loans for the purchase of housing or land for processing;
- Consumer non-purpose loans (for example, for the purchase of equipment).
Types of housing loans
There are two ways to attract foreign funds to purchase real estate - this is Housing loan And . It is necessary to distinguish between these two forms of lending. Choosing housing loans, the buyer becomes the direct owner of the housing he purchases, i.e. housing acts as an object of ownership. In the event that the buyer chooses a mortgage, then the housing he purchases is collateral for the loan, and the rights to it can be transferred to the bank. In accordance with the current legislation of the Russian Federation, housing lending has the following forms:
- Land loan - a long-term or short-term loan for the purchase of land for residential construction;
- Long-term loan for the purchase of housing;
- Short term loan for financing construction works for the reconstruction or construction of housing.
Types of mortgage lending
Today almost everyone commercial Bank may offer several options for mortgage lending under various names. All these options can be structured into several general categories. First of all, it should be remembered that mortgage This is a loan secured by a property. There are the following types of mortgage depending on the collateral:
- Mortgage secured by a house or cottage;
- Mortgages secured by property;
- Mortgage secured by an apartment;
- Mortgage secured by purchased housing.
Also mortgage programs may vary depending on the type of property they are intended to purchase, such as:
- Mortgages for cottages, townhouses and other suburban housing;
- Mortgage for the construction of housing for land owners who want to build a house on it;
- Mortgage for secondary housing;
- Mortgage for housing under construction.
Types of consumer lending
Consumer credit is one of the most common and frequently used types of credit relations. Such a loan is a loan for small legal entities or individuals, issued for the purchase of consumer goods - furniture, household appliances, medicines, utility bills. Consumer loans are of the following types:
- Target - can only be spent on the goods specified in loan agreement;
- Non-target - can be spent on any needs;
- Without a guarantor, with a higher interest rate and a shorter term;
- With a guarantor favorable conditions and for a long time;
- Express loans in supermarkets and outlets;
- Bank loans issued in branches of banks;
- Microcredits with a short term;
- Long-term loans.
New types of lending
The market economy implies the active development of new financial institutions, including new types of credit relations. Lending and its forms tend to adapt to the increased requirements of market participants and offer more and more progressive forms and types of loans. One of these types in Russia is leasing, which is used by enterprises to purchase expensive equipment. Leasing allows you to use the property by paying for it rent and then buy it back residual value. Individuals can use leasing to buy cars. Also, one of the new forms of lending in Russia can be considered banking, according to which an individual is granted the right to use a certain sum of money followed by interest payments.
Main types of lending
All credit relations have a number of common features, according to which the main types of lending in the modern economic system can be distinguished:
- Types of loans may vary depending on the terms. IN international classification recognize the following three types of loans, the terms of each of which may also vary, depending on the country: long-term, medium-term and short-term credit.
- The number of creditors may also change. There are loans with one lender, loans at the expense of banking consortiums (associations) and syndicated loans (at the expense of a third party).
Loans can be provided in several forms - single-currency (ruble, dollar), bi-currency (in two currencies) and multi-currency (in several currencies).
To date, on financial market the most varied coexist. In order to structure them, financiers began to divide them into groups according to certain criteria, for example, by the duration of the agreement, the type of interest rate, etc. There are a lot of such parameters, but among them there are several main ones.
The number of lending programs that banks offer to their customers is increasing every day. But knowing the parameters and properties of the loan product, it can be attributed to one of the categories.
The first most simple sign by which the types of loans are determined is their validity period:
- if the period of the contract is up to 1 year - then it short;
- all loans over 1 year – long-term.
Typically, short-term loans are in the nature of consumer, but long-term - people take to buy real estate and cars.
Classification of loans by purpose
All types bank loans divided into:
- target;
- non-targeted.
Target loans provide for strict control of the creditor over the use of money, non-purpose loans allow borrowers to spend the loan on whatever they want.
Typically, targeted loans are issued for the purchase of cars, real estate. They also include the variety consumer loans, which are taken to purchase a specific product or service, for example, household appliances, payment for education services, etc.
What kind of loans are also depends on the purpose of their registration. The standard classification on this basis is as follows:
- consumer people take them to satisfy their consumer needs, for example, to purchase the necessary thing, make repairs, pay for a certain service. In most cases, these are not targeted loans, which means that people can spend money at their discretion;
- mortgage– this loan program is familiar to everyone who plans to solve their own housing problem with the help of a bank. So called targeted loans for the purchase of real estate. Kinds mortgage lending depend on the object of collateral: residential real estate (house, apartment), commercial real estate(office, workshop, hangar, etc.), land. Mortgage also includes consumer loans secured by real estate;
- car loans These are targeted loans for the purchase of cars and commercial vehicles. With its help, you can purchase both new and used vehicles.
How is a mortgage different from a consumer loan?
Main differences:
- mortgage provides for the presence of security, consumer credit can be without collateral;
- Mortgages are usually a targeted form of financing (except for consumer loans). The bank does not check where the money received on an unsecured consumer loan will go;
- mortgage programs for the purchase of real estate provide for the presence of such a parameter as a down payment;
- buying real estate on credit is the longest-term product (issued for up to 30 years), other forms of lending are concluded for a shorter period (usually up to 5 years);
- the interest rate on loans for the purchase of housing is one of the lowest; for other loan programs, the fee is higher.
Types of consumer loans
In turn, the following types of consumer loans are distinguished:
- card– provide for linking the credit limit to the main account. Via credit card you can make purchases or withdraw money in an amount exceeding the balance of your own funds;
- cash- in this case, the client is given money immediately through the bank's cash desk. To date, such credit products are almost never used. A common practice is to issue a client plastic card, with which he can withdraw money from an ATM or cash desk.
Types of collateral
There is another classification of loans and depends on what acts as a guarantee of the fulfillment of obligations under the contract. According to this parameter, the following types of loans are distinguished:
- without collateral or blank;
- with a guarantee;
- with real estate mortgage
- with a deposit movable property;
- with risk insurance.
Banks, in order to reduce their risks, may also require the client to issue several types of collateral at once, for example: guarantees and mortgages of real estate plus insurance.
It should be noted that consumer cash loans and credit cards are usually issued without collateral. If the desired amount is large, the creditor may require a guarantee from one or more persons.
Let's look at the types of loan collateral in more detail:
- guarantee- by signing the relevant agreement, a legal or natural person agrees to fulfill the obligations under the loan jointly and severally with the borrower. In other words, if the latter ceases to pay under the agreement, the bank requests the guarantors to repay the debt;
- mortgage or pledge real estate - usually an apartment or a house, which is purchased on credit, is a security for the fulfillment of obligations to the creditor. Mortgages are also issued when financing consumer loans for large amounts;
- pledge of movable property- in this case, the bank, in order to reduce risks, takes transport, money or metals in accounts, shares, etc. as collateral. The most popular program where there is a pledge of movable property is car loans:
- risk insurance- insurance services accompany almost every loan. So, with a mortgage, the borrower must necessarily insure the property; for car loans, it is required to have a CASCO policy. Plus, banks can offer the debtor to insure against the risk of job loss, conclude a title insurance contract, etc. Thus, insurance ensures the fulfillment of obligations under the contract in the event of adverse events.
Forms of loan financing
There are types of loans according to the forms of financing:
- credit line;
- overdraft;
- tranches;
- one amount.
Credit line
The credit line can be revolving and non-revolving. Renewable line quite often used for card loans. Its peculiarity is the ability to use credit limit again after redemption. It should be noted that interest is charged only on the actually selected amount of the credit limit.
FROM non-revolving line of credit can be found when applying for a loan for the construction of real estate. This form of financing provides for the gradual use of credit funds over a certain period. In other words, the borrower does not receive the entire amount at once, but in installments. Thus, you can save on interest, as they are charged on the actually selected limit amount.
Unlike a revolving line, a non-revolving line does not allow the borrower to borrow money again after the limit is repaid.
Overdraft
By its principle of operation, an overdraft is very similar to a revolving line of credit. But if the latter provides for the opening of an additional account for the client, then the overdraft is convenient because it is tied to the main account.
Most often, overdraft is a companion of card accounts of participants salary projects. The advantage of this form of financing is that the borrower, when he needs to, can withdraw from the account an amount exceeding the balance of his own money, and when the salary arrives, the loan is closed. You can also pay off the debt by replenishing the card.
The mechanism for repaying debt under a credit line is somewhat different. Considering that the credit is recorded on another account, it is not enough for the borrower to simply replenish the card. He then definitely needs to transfer money from a card account to a credit one, otherwise the loan will not be closed in a timely manner and the bank will apply penalties.
Tranches
Tranche lending is used in the construction of houses. Here, the issuance of money does not take place in one amount immediately after the signing of the contract, but in accordance with the schedule. This form of financing is very similar to a non-revolving line of credit.
Interest rate type
In addition to the above varieties, there are types of loans by type of interest rate:
- floating- this means that the creditor has the right to revise the payment under the contract with a certain frequency, depending on the size of a particular index. Usually the last rate is Libor, Euribor;
- fixed- the rate does not depend on the cost of monetary resources in international markets, and therefore cannot be changed until the end of the contract. With the exception of cases of penalties for violation of the terms of the contract.
As can be seen from the above, how many parameters are used in a loan program, there are so many varieties of loans. It should be noted that the lending market is constantly evolving, so there are more and more types of loans and this classification is not complete. Here, all the main features of loans and their differences from each other are simply indicated.
Alexander Babin
Loan products differ depending on the requirements for the borrower, the purpose of obtaining, and the terms of repayment.
From point of view banking organization Loans can be of two types. An active loan is a loan that is issued banking structure. This option is the most common on the market. Passive loan - the bank acts as a borrower, the assets are provided by the state or other banks. The bulk of loans for Russian market issued to cover the expenses of enterprises or the daily needs of households.
Types of loans
organizations, banks, state structures, individuals receive and repay loans on different terms. For example, targeted loans for agricultural enterprises are characterized by low interest rates and a long repayment period. Types of loans:
- According to the period of use, loans are short-term (up to 12 months), medium-term (up to 5 years), long-term (more than 5 years). Short term loans are different. small amounts and high interest rates, long-term loans are issued for the purchase of housing, equipment, industrial buildings, etc.
- Depending on the guarantees provided by the borrower, there are blank (unsecured) and standard (secured) loans. The guarantee of the return of funds is property (pledge), surety (guarantee of a private person or organization), insurance payments.
- According to the repayment method, one-time loans are distinguished (the borrower closes the loan in one payment for the entire amount of the debt) and loans paid in installments. The second method involves making several payments according to the schedule set by the bank; this type of lending is the most popular.
- Depending on the purpose of obtaining, there are industrial (for financing production), consumer (for the purchase of goods), budgetary (for covering public spending), investment (for business development) loans. The conditions for issuing such loans depend on the financial policy of the state. For example, investment and consumer loans are the most accessible in Russia.
- By calculation method bank loans there are fixed (the cost of using funds is not reviewed) interest rate and floating. The second method involves changing the interest rate depending on the market situation, which is not beneficial for the borrower.
- Depending on the method of issuing loans, they are divided into two types: compensation - is a transfer of funds to the client's current account and payment - when the client is issued a credit card.
The classification of bank loans by size (small, medium, large) depends on the level of development of the financial sector. For example, in the Russian Federation, loans issued to one client and exceeding 5% of the bank's total capital are recognized as large loans.
The development of credit relations contributed to the emergence of new forms of obtaining a loan. In order to navigate the whole variety of loan products and help the borrower choose the right loan, economists have classified loans according to the main criteria.General classification of loans
Credit relations are distinguished by different forms of loans. All commodity-money loans are classified according to the basic features:
Main forms and types of loans
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The banking form of lending is the most in demand. Such a loan is provided exclusively in monetary terms, has a wide purpose and is systematized according to the following indicators:
- maturity;
- security;
- repayment method;
- borrower category / purpose.
Bank loan: main types of credit
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Types of loans to individuals
Personal lending is one of the most popular banking services. Financial institutions introduced special credit programs individuals and small/medium entrepreneurs. Loans to individuals are conditionally divided into 4 groups.
Issued for the purchase of goods and payment for the services provided. This category includes loans for the purchase of equipment, household items, loans for repairs, travel, etc.
- long-term loans, the intended purpose of which is the purchase of housing. The property to be purchased is secured by the bank until the full payment of the loan.
The bank issues a loan to the customer for the purchase vehicle(a financial institution directly transfers money to a car dealership). Loan terms depend on the size down payment, loan amount and repayment period. Typically, banks require the borrower to insure the car under the CASCO program (full vehicle insurance against damage and theft).
- a program that allows you to get cars, machinery and equipment for use. When concluding a leasing agreement, the property becomes the property of the client only after payment of the full purchase price.
Types of consumer loans
Most consumer loans can be divided into several types according to the following main characteristics:
1. Purpose of the loan:
- targeted loans - use borrowed money agreed in advance with the bank (purchase of equipment through an intermediary outlet, payment for training, repairs, etc.);
- non-purpose loans - the borrower does not notify the bank of the purpose of the loan.
2. Method of issuing a loan:
- registration ;
- transfer of borrowed funds to the account of the company-seller of inventory items and services;
- in cash at the bank.
- credit for general conditions for all categories of clients;
- loan on preferential terms for students, pensioners, military, etc.
4. Collateral type:
- unsecured loan - the most popular type of loan among the population, the main advantage is the lack of collateral;
- secured loan - the client provides the bank with movable / immovable property, a deposit or a guarantee of an individual as security.
5. Procedure for obtaining a loan:
- one-time loan - a loan is issued in one amount;
- revolving credit – the client can expect to receive credit funds within the period stipulated by the agreement.
Types of mortgage loans
All mortgage programs can be divided into two main groups: targeted and non-targeted lending.
Target mortgage- a loan for the purchase of housing secured by the acquired or owned by the borrower / co-borrower / guarantor of real estate.
Non-purpose mortgage- issuance of a loan for personal purposes of the borrower secured by real estate.
Standard programs of banks for obtaining a target mortgage:
- mortgage of housing under construction;
- mortgage for the purchase of housing in the secondary market;
- loan for unfinished construction of a private house;
- mortgage for the purchase of land;
- loan for the purchase of suburban real estate.
Many banks provide mortgage lending for privileged segments of the population: young and large families, teachers, military personnel, police officers and Russian Railways.
Types of public credit
State credit - system public relations where the state acts as a creditor/borrower through authorized structures.
State loans are systematized according to the following criteria:
- validity;
- the status of the issuer participating in credit legal relations;
- category of the subject - the holder of securities;
- type of profitability - form of payment;
- method of placement; form of loan.
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The most common method government lending- bonds. security paper certifies the holder's right to receive specified period its face value / property rights.
International credit classification
International credit is the movement of funds between countries. Redistribution of capital occurs with the help of correspondent banks. States are creditors banking institutions and monetary organizations. Borrowers: transnational banks (TNB), entrepreneurs and public authorities.
Types of international loans
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- Getting a vehicle for personal use through leasing is more profitable than car loans. The loan is issued at a preferential rate, the requirements for the borrower are less stringent.
- Loan from designated purpose usually cheaper than other types of loans.
- without collateral/guarantee is more expensive than "secured" loans.
Loan type This is a characteristic of loans on economic grounds. The main purpose of lending is the movement of capital. Lender without finding best use funds, leases them to the borrower for a certain period of time with subsequent return and a fixed fee. A loan, in fact, is a financial transaction with benefits for both parties.
To date, no unified global standards have been established for dividing loans into types. In our country, loans are classified depending on the object of lending, payment, urgency of lending, its security, etc.
The main popular types of loans are: car loans, mortgages, consumer loans and cash loans.
Loan types.
By maturity, there are:
- Overnight - interbank lending for one night;
- Super-term - credit up to 3 months;
- Short-term - a loan is issued for up to a year;
- Medium-term - lending from 1-5 years;
- Long-term - the repayment period is more than 5 years;
- On-call - presented in the form of a credit line, mainly used by brokers.
By availability types of credit distinguish:
- Unsecured - a loan issued, at the risk of the lender, without a guarantee and any additional guarantees;
- Partially secured - the collateral under which the loan is issued only partially covers the amount of credit funds, or the guarantor assumes the obligation to pay only part of the debt;
- Secured - the collateral under which the loan is issued fully covers the loan, or the guarantor guarantees the payment of the entire amount of the debt.
According to payment, types of loans are distinguished:
- Interest - the most common type of lending. The borrower, borrowing money, undertakes to pay part of the debt every period (month, quarter or year), including interest.
Interest-bearing loans can be divided into several subspecies:
- Rollover - interest rates that apply mainly to long-term loans. These are loans without a fixed interest rate, which varies depending on fluctuations in foreign exchange market;
- Fixed - interest rates remain fixed throughout the entire period of use of credit funds;
- Mixed - a loan containing a fixed interest rate (basic) and variable (floating).
- Interest free or targeted loan(issued for the purchase of a specific product) - an agreement is concluded between the bank and the seller and the seller pays the interest. At the same time, he compensates for the interest paid by the inflated price of the goods. Less often, a large seller himself becomes a creditor and is ready to give an interest-free deferral of payment.
- With a fixed payment - receiving credit money, partially or fully repaying them, the borrower undertakes to pay a fixed fee. This type of loan is quite rare.
Purpose of issuance types of credit distinguish:
- Target - loan funds it is allowed to use only for the realization of the purpose foreseen in the loan agreement. The most common are housing loans (mortgage), car loans, land, educational, brokerage and, of course, consumer loans.
- Inappropriate - borrowed money, the borrower has the right to spend at his own discretion.
Depending on financial and social status:
- Unofficially working or unemployed - this includes categories of people who are not able to confirm their income (dividends, interest on profits, income from renting housing, etc.);
- For individual entrepreneurs- incomes of this category of people are difficult to control, therefore, lending conditions are more stringent;
- Pension loan - the amount of such a loan depends on the amount of pension payments and the age of the borrower.
Depending on the lender:
- Usury - a loan that involves very high percent and material security. Such type of loans is very rare, mainly inherent in countries with a poorly developed credit system;
- Banking - the creditor is a bank, or credit organisation;
- Commercial - a loan deal between legal entities or legal and individuals;
- State - a loan issued by a state bank on special conditions (more favorable). Very often, state credit programs for young families are called, for example: youth credit;
- International - investment investment money from one or more states to another.