What is a bank loan? What are credit and debit in simple terms

The emergence of credit as a special form of value relations occurs when the value released from one economic entity does not enter a new reproduction cycle for some time. Thanks to the loan, it moves from an entity that does not use it (the lender) to another entity that needs additional funds (the borrower).

Credit functions

Functions of credit: redistribution, creation of credit instruments of circulation; reproductive and stimulating.

Thanks to the redistribution function, the temporarily released value is redistributed. It can be carried out at the level of enterprises, industry, state (national economy), world economy (world economy). Redistribution is carried out on the terms of return of cost.

The function of creating credit instruments of circulation is associated with the emergence of the banking system. Thanks to the possibility of storing funds in bank accounts, the development of non-cash payments, and the offset of mutual obligations, credit means of circulation and payment appeared.

The reproductive function of a loan manifests itself in two ways: 1) the borrower’s receipt of a loan provides him with the necessary amount of capital to conduct business (production). Through credit, the reproduction of an economic entity (product producer) as such occurs; 2) as a result of providing credit to various enterprises, both the best and worst conditions for society for the production of goods (quality, cost, price) are reproduced.

The stimulating function of credit is manifested in the possibility of developing production without having your own funds. Thanks to the loan, enterprises receive a powerful incentive for further development.

Loan forms

Cash form of loan involves the transfer of a specified amount of money for temporary use. The monetary form is predominant in modern economic conditions. This form of credit is actively used by all subjects of economic relations (state, enterprises, individual citizens) both within the country and in foreign economic turnover. In the monetary form of a loan there is no equivalent commodity-money exchange, but there is a transfer of value for temporary use with the condition of return after a certain time and, as a rule, with the payment of interest for its use.

Mixed loan form arises in the case when a loan was provided in the form of a product and was returned in money, or vice versa - provided in money and returned in the form of a product. The latter option is often used in international payments, when cash loans received are paid for by the supply of goods. In the domestic economy, the sale of goods in installments is accompanied by the gradual repayment of the loan in cash.

The role of credit

Credit plays an important role in self-regulation of the amount of funds required to carry out business activities. Thanks to a loan, enterprises have at any time the amount of funds necessary for normal operation.

The role of credit is important for replenishing working capital, the need for which is not stable for each enterprise and varies depending on operating conditions: market, natural, climatic, political, etc.

The role of credit is great for the reproduction of fixed assets. Using a loan, an enterprise can improve and increase production much faster than without it.

The role of credit is important in regulating the liquidity of the banking system, as well as in creating an effective mechanism for financing government spending.

Types of credit

In different cultures

Credit in Mesopotamia

Credit in the Inca Empire

Administrative officials kuraki during lean years from storage facilities, which were filled with crops obtained from the fields - chakara ruler Inca, with the permission of the Inca himself, they gave food to the poor people of the settlement, and at the same time included in a pile reports on what was received in this way. Therefore, these deductions were made as a loan, that is, it can be argued that the Incas had an institution of financial lending. Also, everything that, as Pedro Cieza de Leon pointed out in his Chronicle of Peru, was given to individual residents from the warehouses of the Inca ruler, was handed over for reporting to the employees of the kamayos, who were engaged in quipus. The kippah showed what each Indian did, and everything he did was deducted from him from the tax that he had to pay. But the repayment of the loan was not made by the same types of products, but was paid for by different types of work. The situation was the same with the issuance of provisions from train warehouses for an entire community or province:

... if suddenly some lean year came, they also ordered the opening of warehouses and would provide the necessary provisions on loan to the provinces, and then, in a year of abundance, they gave and supplied them [that is, to the warehouses] again, according to their accounting, a certain amount .

Cieza de Leon, Pedro. Chronicle of Peru. Part two. Chapter XIX.

Loan in the form of salary

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Notes

Literature

• Money, credit, banks: Textbook / Ed. O. I. Lavrushina. - M.: Finance and Statistics, 2000. - 464 p.
• Finance and credit: Textbook / Ed. prof. M. V. Romanovsky, prof. G. N. Beloglazova. - M.: Higher Education, 2006. - ISBN 5-9692-0039-5.

Excerpt characterizing the Credit

One of the doctors, in a bloody apron and with bloody small hands, in one of which he held a cigar between his little finger and thumb (so as not to stain it), came out of the tent. This doctor raised his head and began to look around, but above the wounded. He obviously wanted to rest a little. After moving his head to the right and left for a while, he sighed and lowered his eyes.
“Well, now,” he said in response to the words of the paramedic, who pointed him to Prince Andrei, and ordered him to be carried into the tent.
There was a murmur from the crowd of waiting wounded.
“Apparently, the gentlemen will live alone in the next world,” said one.
Prince Andrei was carried in and laid on a newly cleaned table, from which the paramedic was rinsing something. Prince Andrei could not make out exactly what was in the tent. Piteous moans from different sides, excruciating pain in the thigh, stomach and back entertained him. Everything that he saw around him merged for him into one general impression of a naked, bloody human body, which seemed to fill the entire low tent, just as a few weeks ago on this hot August day the same body filled the dirty pond along the Smolensk road . Yes, it was that same body, that same chair a canon [fodder for cannons], the sight of which even then, as if predicting what would happen now, aroused horror in him.
There were three tables in the tent. Two were occupied, and Prince Andrei was placed on the third. He was left alone for some time, and he involuntarily saw what was happening on the other two tables. On the nearby table sat a Tatar, probably a Cossack, judging by his uniform thrown nearby. Four soldiers held him. The bespectacled doctor was cutting something into his brown, muscular back.
“Uh, uh, uh!..” it was as if the Tatar was grunting, and suddenly, raising his high-cheekboned, black, snub-nosed face, baring his white teeth, he began to tear, twitch and squeal with a piercing, ringing, drawn-out squeal. On another table, around which a lot of people were crowding, a large, plump man with his head thrown back lay on his back (the curly hair, its color and the shape of the head seemed strangely familiar to Prince Andrei). Several paramedics leaned on this man's chest and held him. The white, large, plump leg twitched quickly and frequently, without ceasing, with feverish tremors. This man was sobbing convulsively and choking. Two doctors silently - one was pale and trembling - were doing something on the other, red leg of this man. Having dealt with the Tatar, on whom an overcoat had been thrown, the doctor in glasses, wiping his hands, approached Prince Andrei. He looked into the face of Prince Andrei and hastily turned away.

What is a loan?

Credit (loan, borrowing) - an amount of money that is transferred by one party to the agreement to another party on the terms of payment (the price is interest), urgency (short-, medium- and long-term loans differ) and unconditional repayment. Any economic entity can act as a lender and borrower in the process of functioning of the economic system. But the leading place here is occupied by banks: lending is a traditional type of service they provide, the main source of funds for their existence.

What are lending principles?

Principles are the basic rules of any type of activity, recognized as such due to the fact that they express certain causal relationships and are consistently repeated in a large number of cases.

1. principle of urgency: the loan is issued for a certain period

2. repayment principle: within a certain period, the loan amount must be repaid in full

3. payment principle: for the right to use a loan, the borrower must pay a certain amount of interest

4. the principle of subordination of a credit transaction to legal norms and banking rules: in particular, a loan agreement or agreement in written form is required, which does not contradict the law and regulations of the Central Bank of the Russian Federation

5. the principle of immutability of lending conditions and provisions of a loan agreement or agreement: if the conditions change, this must be done in accordance with the rules formulated in the loan agreement or agreement itself or in a special annex to it

6. the principle of mutual benefit of a credit transaction: the terms of this transaction must adequately take into account the commercial interests and capabilities of both parties

A special group of principles should include common lending rules that are used if such is the will of the parties expressed in the loan agreement, and should not be applied if not included in such an agreement:

7. principle of targeted use of credit

8. principle of secured lending: the loan can be secured fully, partially or not secured at all

In addition, another group includes lending principles, which are intended for “official use” by bank employees and should be enshrined in their internal documents as an element of credit policy.

Bank lending methods

A lending method can be defined as a set of techniques by which banks issue and repay loans. There are three such methods:

1) method of lending based on turnover;

2) method of crediting on balance;

3) balance method.

When lending by turnover, the loan follows the movement and turnover of the lending object. The loan advances the borrower's costs until his resources are released. The loan size increases as the objective need for the loan increases and is repaid as this need decreases. This method ensures continuous, synchronous movement of credit as demand decreases or increases; it is a continuously renewable process.

When lending by balance, the loan is interconnected with the balance of inventory and costs that caused the need for a loan. For example, an enterprise can already purchase the valuables it needs from its own financial sources and only then apply to the bank for a loan secured by them, thereby compensating the costs incurred. The loan in this case is issued against the balance of inventory items as compensation, and not as an advance on costs (already incurred in this case) for the purchase of necessary materials. Most often, balance lending, as a rule, narrower, covers a smaller range of lending objects, mediates one of the objects, while turnover lending is associated with the movement of not a separate, private, but an aggregate lending object.

In practice, lending by turnover and by balance can be combined; a turnover-balance method is formed, when a loan at the first stage is issued as the need for it arises, and at the second stage it is repaid within strictly defined terms, which may not coincide with the volume of released resources. At the first stage, the loan is issued at the initial stage of turnover of inventory items and costs; at the second stage, it is repaid on the basis of the balance of the client’s urgent obligations to the bank.

The organizational movement of the loan (its issuance and repayment) is reflected in the client’s loan accounts, which the bank opens for him. A loan account is an account that reflects the client’s debt (debt) to the bank for loans received, the issuance and repayment of loans. All loan accounts are characterized by their general design: the issuance of a loan takes place on their debit, repayment - on the loan, the client's debt to the bank is always on the left, debit side of the loan account.

Despite the general unity of the scheme for reflecting debt, issuing and repaying a loan, loan accounts may differ from each other: 1) according to the purpose of opening; 2) in relation to turnover.

For the purpose of opening, loan accounts can be deposit-loan, when the client receives the right, upon exhaustion of his own funds deposited with the bank, to receive a loan in a certain amount. Most often, such loan accounts can be used by the population, accumulating their savings in the accounts and having the opportunity, if necessary, to use a bank loan. It turns from a deposit account into a loan account if the balance on it becomes a debit account.

Loan accounts may be opened solely for the purpose of spending the loan currency. These are a kind of accounts with a credit turnover, with a declining debit balance, a one-time loan received for the purpose of its subsequent use and with gradual repayment of the loan.

In the same class, there are savings-expenditure loan accounts that combine both the movement of funds on a loan and on the debit of the account. For example, a client’s deposit can be systematically replenished with new savings, but their expenditure will always exceed receipts, and therefore the account balance continues to be a debit.

Based on their relationship with turnover, loan accounts can be of three types:

1) turnover and payment;

2) balance-compensation;

3) reverse balance.

These three types of loan accounts essentially correspond to three lending methods: by turnover; by remainder; balance method.

When opening a revolving payment loan account, the client has the opportunity to pay payment documents for a wide variety of needs: invoices for goods and services, payroll checks, payment orders for repayment of accounts payable, transfer of taxes and other payments. For all these payments, it is enough to have one revolving payment or revolving balance account, into which certain payments will be received to repay the resulting loan debt.

To make all payments, the client can use a balance-compensation account, but then he needs to open them as many as he needs. A client can have as many balance-compensation accounts as he has private lending facilities. This loan account, compared to the two previous accounts, is less flexible, requires more technical documentation, but at the same time, the intended purpose of the loan is more clearly visible on it.

In practice, revolving payment and revolving balance accounts are used for intensive payment turnover, in seasonal industries, trade, agriculture, procurement organizations, continuous, almost daily supplies of inventory and costs. The scope of application of balance-compensation accounts is somewhat narrower; they are used for one-time, occasional needs of clients for additional financial resources.

A special type of revolving payment loan accounts is a current account, which reflects all payments of enterprises; it bears costs both for the main production activities and for the expansion and modernization of fixed assets. This form of loan account is the most capacious; it is opened to the highest category of borrowers with first-class creditworthiness.

The peculiarity of modern lending practice in organizational terms is that it is not built according to a single template, but on a multivariate basis. The bank client himself chooses which form of lending suits him best, which loan account is more appropriate for him to open, and which mode of issuing and repaying loans is more useful to establish.

Principles of bank lending

Bank lending to enterprises and other organizational and legal structures for production and social needs is carried out in strict compliance with the principles of lending, which represent the main element of the lending system, since they reflect the essence and content of the loan, as well as the requirements of objective economic laws, including in the field of credit relationships.

The principles of lending include: urgency of repayment, differentiation, security and payment.

The feature that distinguishes credit as an economic category from other economic categories of commodity-money relations is repayment. It is an integral feature of the loan, its attribute, without which it cannot exist.

Urgency lending is a necessary form of achieving loan repayment. This principle means that the loan must not only be repaid, but repaid within a strictly defined period, i.e. in it the factors of time find concrete expression. And, therefore, urgency is the temporary certainty of the repayment of the loan. The loan term is the maximum time for the loaned funds to be in the hands of the borrower and acts as a measure beyond which quantitative changes over time turn into qualitative ones: if the term of using the loan is violated, then the essence of the loan is distorted, it loses its true purpose, which negatively affects the state of the monetary circulation in the country.

A loan is an opportunity to purchase necessary things or services faster, but an unscrupulous lender can only increase the financial problems of the borrower and deprive him of the opportunity to obtain the desired goods. Therefore, you should be careful when applying for a loan.

Credit - what is it in simple words

Credit- is the provision of funds by a bank on a loan on repayment terms.

First of all, it is worth knowing about a loan its four main properties. This is repayment - the borrower can take a certain amount, but at the same time he undertakes the obligation to repay them. Payment - no matter how profitable the loan is - is always a service from the bank, and you will need to pay for it. Urgency – the terms within which the borrower will repay it are strictly specified. Differentiation is a special approach in each individual situation.

The functions of a loan are to redistribute funds and assist in the development of an organization or maintaining the well-being of a family.

Loan forms

The loan can be targeted or non-targeted. Non-targeted loan is a loan that the borrower spends at his own discretion, without coordination with the bank. Targeted loans They differ into several types, depending on the purpose for which they are taken:

• land loan;
• brokerage loan;
• other.

You can also divide loans into several types depending on how the funds are received by the borrower:

• credit line.

Conditions for obtaining a loan

The conditions under which a borrower can receive a loan vary greatly depending on the bank, the financial condition of the borrower himself and the purposes for which the loan is issued.

Banks offer a variety of lending conditions, including a loan to pensioners for urgent purposes, another option is a loan, the interest rate of which becomes more or less favorable depending on the number of documents provided.

When applying for a loan at any bank, you will need to fill out a borrower questionnaire and contact a bank employee. For this purpose, in addition, some banks allow you to apply for a loan completely online, however, when applying for a loan for a large amount, you will most likely need to visit a bank branch.

Next, the bank employee, based on the borrower’s data, will determine the terms of the loan, such as the interest rate and credit limit. The loan will be more profitable the more effectively the borrower can prove that he will be able to repay the debt. This means that the bank will check the client’s solvency, including in the long term. To do this, the bank requests certain documents from the borrower. For example, it may request:

• certificate 2-NDFL;
• a copy of the work book;
• pension certificate and a certificate from the organization that pays the pension;
• income certificate in the form of a bank.

A loan without certificates is also an affordable option that is offered by many banks, including VTB, Rosbank, and Moscow Credit Bank.

After the loan is issued, the borrower must gradually repay the debt in accordance with the payment schedule. It is necessary to pay the loan as accurately as possible, since in case of delay and serious non-payment, the borrower’s credit history will deteriorate, which will affect all his further attempts to obtain a loan from any bank. A loan with bad credit is possible, but it will likely not be nearly as favorable as a loan for a borrower who has never missed a payment.

What is loan refinancing?

Refinancing your loan can be a great way to pay off your debt. In this case, the solution is to apply for a new loan, which allows you to pay off the old loan.

You can refinance one loan from another bank:

• consumer;
• mortgages;
• car loan;
• cash loan.

The terms of this refinancing: a loan in the amount of 50,000 to 500,000 rubles for a period of 1 to 5 years with an interest rate of 19.9%.

Loan calculation

And another useful tool, which is presented by many banks online, is with which you can calculate a loan without the help of a bank employee. Thus, you can enter your data on the bank’s website and clarify how profitable a particular loan will be, depending on the capabilities and requests of each individual borrower.

Bankiros loan calculator

Credit- type of transaction that is concluded between the borrower and one of the credit institutions (bank or non-bank credit institution). As a result of such a transaction, the lender, under certain conditions, provides the borrower with a loan, and an agreement is concluded between them, which stipulates the term, amount of the loan and remuneration for its use (interest).

Different credit institutions have different lending schemes: a loan can be issued secured by property (with collateral) or without it, under the guarantee of third parties or subject to compulsory insurance. In any case, it depends both on the credit institution itself and on the type of loan provided. The recipient (borrower) can be both individuals and legal entities(business loan), usually a loan is provided, for example, for the purchase of a car, real estate (mortgage), large household appliances, or for arbitrary needs. The amount of remuneration (interest rate) differs significantly depending on the purpose of lending.

Conditions for the emergence of credit relations

1. Credit is always borrowing someone's property. Therefore, under a credit transaction there arises material liability its participants according to the obligations regulated by the agreement.
2. Conclusion of a loan agreement becomes possible as a result of the coincidence of economic interests of the lender and the borrower. Of course, this situation arises only when the creditor has available free cash which he can" lend"and the borrower there is a need in such means, in this case, the amount, term, security of the loan and the amount of payment for the borrower’s use of monetary resources actually play a decisive role in the agreement of the parties to conclude a transaction.

Types of loans

Taking into account the fact that even in one credit institution there may be many lending options and several types of loan programs for each of them, we will consider with you only the main types of loans that banks provide:

1. Consumer loan Available only to individuals. The objects of lending of this type are those goods or services that will be purchased by an individual, in other words - for consumer purposes. For example, such goods and services could be: household appliances for the home, furniture, etc. This type of loan is characterized by relatively high interest rates, as well as not very large amounts of money acting as a loan.
2. - this type of loan can also be provided to both individuals and legal entities, as is clear from the name itself, the purpose of lending in this case can only be the purchase of a car with the help of borrowed funds. Interest rates are already significantly lower than for consumer lending, and the amounts involved in the transaction are significantly higher (comparable to the cost of a car). In addition, there are special government programs in which a car loan will be partially repaid by the state in the event that the purchased car is of domestic production.
3. Educational loan is provided exclusively for the borrower’s education. The object of lending, obviously, here is payment for education in any educational institution (except on a budget basis). This type of loan also has low interest rates, as well as preferential terms of repayment and deferred payments for several years. Part of the debt, as in the case of domestic cars, can be covered by the state.
4. - provided individuals to purchase your own home. It is one of the types of secured lending. The object of lending in this case can be exclusively purchased real estate - the lowest among all types of loans, the loan amounts are the largest (commensurate to the cost of housing), and the loan terms are on average 10-20 years. The purchased property remains pledged to the bank, it is this type of lending that is considered the most reliable, but the quantity also makes up a serious list. Everything can take from 2 to 6 months (depending on many factors).

Do not rush to sign the loan agreement of the bank you like. Before you take it, try to carefully, without pressure from clerks, study all the features of the chosen program. A standard loan consists of only two parts: the principal (loan body) and the interest part. As a rule, modern banks like to add all sorts of additional commissions and fees to the agreement, which they “forget” to indicate in advertising brochures. This is how the third, hidden part of the loan appears, which the borrower also has to repay. Some banks advertise a low loan rate, but in order to cover additional costs they set an increased interest rate for the first or last month.

Credit application

Modern borrowers apply for a loan not only at a bank branch, but also on the website of the institution they like online. Recently, the popularity of online loans has increased rapidly. To confirm the request, the potential client receives an SMS or a call back from the manager of the credit institution. After this, the money is transferred immediately to or issued at the branch at the specified address. Today in Russia there is one bank that is considered a “champion” in issuing online loans. This is Tinkoff Credit Systems Bank. The rates are slightly higher than for similar products from other institutions, but you can actually get a loan without leaving your home.

Loan calculator

The loan calculator is a convenient tool for planning financial possibilities and calculating the amount of the monthly payment, taking into account all additional fees. Some calculators even offer the service of calculating the effective interest rate on a loan (the real interest that the borrower pays for using the money).

The loan calculator gives an approximate, but at the same time quite clear assessment of the upcoming level of expenses. Thanks to the tool, you will quickly understand how individual calculation methods, interest rates, and loan terms affect the final amount payable.

Bank loan

In recent years, the procedure for obtaining a loan from a bank has been significantly simplified and shortened. To apply for a loan, you just need to take your passport, INN and SNILS with you. Loans are available to any citizen of the Russian Federation who has permanent registration in one of the regions of the country.

To submit an application, simply contact a bank employee for a free consultation. The decision is made from several hours to several days. Small amounts are issued without proof of income, collateral or guarantor. To get a loan for a serious amount, you need to convince the bank of your own solvency or provide valuable property as collateral.

Loan without certificates

A loan without income certificates is one of the types of express loans, for which it is not necessary to attract a guarantor and confirm income using additional documents. The registration procedure takes no more than a couple of hours. The package of documents consists of a passport and any other document (the client selects a convenient option from the list provided). At first glance everything looks very attractive. The price for convenience is a higher interest rate. Less significant disadvantages are the short repayment period and limited amount limit.

Cash loan

A cash loan is perhaps one of the most popular banking products. These loans do not have a specific purpose, so you can use them to make repairs, go on a trip, or finally make a long-awaited purchase.

A cash loan has specific advantages:

1. Minimum package of documents for submitting an application.
2. Quick decision-making, mainly in favor of the borrower.
3. In most cases, collateral and surety are not required.
4. Several convenient repayment methods are available.

Loan online

Online loans are becoming more popular in our country due to the simplicity of the application procedure and accessibility. Even the main bank of the Russian Federation, Sberbank, actively practices issuing loans on the Internet. Before submitting an application, you will need to register on the official website of the institution and log in to the Sberbank Online system.

If registration is successful, just click on “Online loan application” and fill out a simple form. After choosing the type of loan and answering simple questions, your application is sent for consideration.

Consumer loan

Consumer loans are most often issued to buyers of popular goods. This type of loan also has its obvious advantages:

1. Almost instant registration, which takes from 10 to 30 minutes. Borrowers appreciate the opportunity to resolve a financial issue in a short time.
2. Really loyal terms of provision. Insurance contracts, income certificates, guarantors and collateral are almost never required.
3. Repayment is available in any convenient way. There is an opportunity to pay off obligations ahead of schedule.
4. Registration is often accompanied by additional bonuses. The bank offers clients plastic deposits, the opportunity to open a deposit at a favorable interest rate and other financial products.

What is a mortgage loan?

A mortgage loan is a large amount for the purchase of a home with a long repayment period. A house or apartment registered with a mortgage is used as collateral. Sometimes real estate owned by the borrower is used as collateral.

Mortgage loans have lower interest rates. But the requirements for potential borrowers are very high. Confirmation of a solid income and impressive work experience are required.

In recent years, almost all banks require, as an additional condition, to insure the life of the borrower, the property located in the property, or both objects at once.

What is the loan rate?

The loan rate, which is also known as the interest rate or interest on the loan, is the cost of borrowing money that a bank customer pays to the financial institution for the amount lent. The indicator is calculated as a certain percentage of the loan amount over a period of 12 months (for example, 15% per annum). Interest is paid in the currency in which the loan was issued. The interest rate is influenced by the loan term and the level of risk that the banking structure allows. The lowest interest rates can be obtained on loans with collateral.

What is loan refinancing?

Loan refinancing is a new loan on more favorable terms, which is taken out to pay off an old loan. Refinancing is often called a refinance or a loan on loan. Due to legal specifics, refinancing is classified as loans with a special purpose. The signed agreement must contain wording about the need to use the money received to pay off the debt at a commercial bank or other credit institution.

Loan target orientation

The targeted orientation of the loan as a characteristic of the loan gives the bank client certain advantages. For example, getting a targeted loan is much easier. The requirements for borrowers who are allowed to spend on any needs are significantly stricter. Interest on a targeted loan is always much lower. When purchasing real estate or a vehicle, the purchased property is used as collateral. For this reason, the bank’s risks are significantly reduced, and it is willing to relax the requirements.

Loan differentiation

Credit differentiation is one of the features of modern work with the distribution of borrowed funds. The concept means dividing borrowers into certain categories depending on their level of solvency, which is confirmed in one way or another.

There are groups of borrowers whose solvency is questioned by lenders. Other categories, on the contrary, have an impeccable reputation and have repeatedly confirmed their reliability. To differentiate loans, a well-developed credit rating scheme with solvency criteria and other requirements for potential borrowers is used.