Lending in the broad sense of the word refers to the provision by one individual or legal entity, as well as by any other entity, of funds or goods to another on a reimbursable or non-reimbursable basis. In the narrower concept of the term “credit”, we are talking about funds that specialized organizations allocate to their customers on certain conditions, while receiving some benefit.
Naturally, the modern development of the financial market implies a huge variety of loans that differ in a variety of parameters and characteristics. In this article, we will consider the main types of loans. And if you need to earn money quickly – you can visit Woo Casino – here you can find a lot of games that will allow you to earn good money.
Consumer loans provide for the receipt by the client of borrowed funds directed by him to satisfy personal needs by making any purchase or consuming various services. Making consumer loans is considered one of the most popular types of bank lending, which is due to several reasons. First, such loans can be obtained fairly quickly. Secondly, the minimum possible requirements are imposed on the client, which is often limited to the provision of a passport.
Car lending is actually a type of consumer loan, however, it has several features that are very characteristic of this financial transaction. The most significant of them include:
- target nature of the loan, providing for the expenditure of funds received exclusively for the purchase of a car;
- the need to insure the vehicle and such an obligation of the client is provided for directly by current legislation.
Sufficiently favorable conditions for obtaining car loans have become the reason that even in the crisis years, a significant part of car purchases falls on this particular method of financing.
In addition to banking institutions, numerous microfinance organizations also provide lending services. Given the peculiarities of the loans provided by such companies, they are often called microcredits or microloans. This is due to the fact that in most cases we are talking about small amounts in cash or on a card, issued for a short period.
Mortgage credit lending
Characteristic features of mortgage lending are the significant amount of funds allocated by banks, as well as the serious duration of the loan. The essence of the mortgage lies in the fact that the borrower draws up the housing he purchases as collateral. In some cases, another real estate of the client is used to secure the mortgage loan.
Business Development Loans
Favorable conditions and opportunities for its lending are obligatory factors in the development of business in the country. There are a large number of different loans, the funds of which can be used to start or develop a business.
Leasing refers to a separate type of lending, which is often called a financial lease. Its mechanism is as follows – the borrower receives from the lessor the equipment, vehicle, or even real estate he needs, exploiting and gradually paying for it. Until the last payment is made, the leasing object is owned by the lender, and after the full amount of the financial lease agreement is paid, it passes to the borrower. An important advantage of this type of lending is the tax benefits provided by law.