Today, banks offer many different loan programs. Loans can be issued to support small businesses, and for other purposes. Nowadays most people have a Bank loan. The types of loans that are most popular among the population: mortgage, consumer, car loan and a credit card.
The most expensive loans
There is a perception that the most expensive are consumer loans and credit cards. This is due to the fact that the Commission on them at times overstated, in General, it can be up to 50% per annum. However, the most expensive loan is the mortgage. The overpayment will be hundreds and even millions. But despite these conditions, there are a lot of volunteers who would like to take this Bank loan. Types of loans read more we will review below.
Enjoys the greatest popularity among the population. Often people take it for the purchase of major appliances: refrigerator, TV, washing machine etc. Also thanks to him you can pay in other firms, such as to buy a ticket at a travel Agency. The terms of the loan range from several months to a year. It is divided into two categories: earmarked and non-earmarked lending. For example, the client needs to buy a fridge. He enters the store, selects the item and a Bank which gives out loans.
The second type of loan issued by the Bank. The client prepares the agreement, takes the money and spends money at its own discretion. Next to the Bank every month the borrower pays the set amount.
Mortgage loan is given for purchase of real estate. The purchased home may be a secondary or to be in new buildings. Guarantee loan is purchased housing or other real property owned from the borrower. The Bank providing this service, you must pay the first installment of 10 per cent of the total. In addition, the borrower will need to insurance and their own health. All financial costs will be borne by the borrower. Terms of home loan repayments range from 10 to 30 years.
A car loan
The loan issued for the purchase of a new or used car. In this case, the borrower will need to insure their own health and program auto CASCO. The maturity of the loan several months or more.
A credit card is a very convenient system of payment and is very popular among many people. It is possible to pay for purchases in the store. Money on this card lists the Bank. The usefulness of credit card is that you can make any purchases without having funds. But there is a drawback is the very high interest rate. In the case of late payment, followed by severe penalties.
In this case, is given a certain amount when you pledge property, for example car. The main disadvantage of this loan is small term debt.
Commercial loan for small businesses
The commercial loan – is a direct exchange between the two organizations. The first organization gives money, and the second for them to provide any product or service. Such a loan is the best option for financial support of small business.
Small business lending most often occurs at the expense of a commercial loan. This type of loan refers to the classic loans that are issued in the Bank. The results of such a loan may be made between commercial organizations. The main essence of the loan is that one entity gives money to another for a product or service, both parties sign an agreement. For example, one company sells another 20 tons of metal. The cost of one ton is 4000. Under the agreement, repayment will be made later, 7 months after the transaction. In case of postponement, the organization that received the loan, obliged to pay an additional 5% of the amount of metal sold every month.
Features of a commercial loan
A lender can be not only buyers but also sellers. In the first case, the buyer pays a certain amount for the commercial loan. This is a pre-pay for a certain product or service. If a lender acts as the seller when the loan is calculated, the period for which the buyer is obliged to pay the debt. It is also possible to repay the loan in installments. But in this case the interest rate will be provided.
The main advantages of trade credit is a percentage which is much lower than in conventional banks. The advantages include the fact that the commercial loan is satisfaction from both sides. A buyer has the opportunity to purchase exactly the product for which he cannot pay immediately. And the seller will replenish the customer base. It is worth noting that the interest rate is already included in the price of the goods. The organization may offer loans and to obtain them. This fact gives a possibility to considerably save financial costs. Due to this small business loans occurs on very favorable terms.
The main disadvantages include a limited commodity reserve from the seller. So, in order to expand its facilities to organizations in the calculation of often used checks and bills of exchange. There is also a certain risk that the buyer can simply go bankrupt and not in time to repay the loan. A significant drawback is the short repayment period. But some organizations can provide its customers with deferred payment.
As for interest rates, in this case every buyer she negotiated individually. If the contract States that the lender provides the borrower not money, and things, the interest rate is excluded. If the borrower was in violation of the loan agreement, he is obliged to pay a fine. The amount of the fine is calculated individually. If the contract provides a fixed interest rate, the refinancing rate is used. If the borrower is not willing to negotiate the interest rate, he can get a similar loan from a commercial Bank.
Types of commercial loans
The commercial loan is a type of loan that is divided into several categories: fixed-term payments, payment after complete implementation of the product, open account. In the latter case, the organization receives a loan in order to repay the previous. It is issued only to those organizations that have been cooperating among themselves.
What are the types of commercial loan? There is also bill credit, which provides for the issuance of special promissory note documents. According to these documents the borrower is required to pay the company a certain amount and within the specified period. If there is the implementation of a new product and demand for it is impossible to predict, it uses such a category of loan as consignment. In this case, the buyer repays the loan only after the sale of all goods. Otherwise the goods will be returned to the organization that provided the loan.
There is another category of commercial loans – seasonal. The manufacturer can save on warehousing and storage and customer can profitable to sell goods during the seasonal sales. If the buyer repays the loan on time, then it may be a discount. Most often it is 1-3%.
Very often, the contract of commercial loan is made by those who are engaged in entrepreneurial activity. In order to benefit the most from the loan terms, you need to properly execute the contract. If the contract loan terms will be spelled out accurately, it will be very difficult to recover from the organization the payment for the use of commercial credit. To avoid this, you should observe the following rules:
First, if the contract provides for a deferred payment, specify to charge account creditor from the borrower a payment for granting of a commercial loan.
Second, you must specify the amount of payment, and the conditions under which it will be. It can be annual or daily, and will depend on the granted amount.
Thirdly, it is important that the paragraph with the terms of the loan agreement was located after the division of the responsibility of the parties. It is also worth noting that the fee for the loan is not a measure of responsibility. If the terms of the loan are under the responsibility of the parties, in the event of litigation, this item will be perceived as a penalty payment. As a result, it can be reduced or the court may refuse its payment.
Fourth, a very important point in the contract is that payment for use of commercial loan will begin upon execution of certain works or the delivery of the goods, and not from the date the payment becomes overdue. If this paragraph were violated, the court will schedule a hearing on the payment of a penalty.
Based on the above example. The parties signed the agreement on terms of deferred payment. This means that the supplier is entitled to recover a certain amount from the buyer for the use of trade credit. The fee for the loan starts from the date of sale of the goods and to the specified maturity date. The interest rate is 0.1% of the value of the sold goods and is imposed for each day of the loan. In case of breach of contractual obligations, this payment is not the measure of responsibility, it is a payment for the use of the loan