But inflation devalues our savings with great speed. Naturally there is a positive answer to the question: Is it advantageous to still take the credit.
Related article: Mortgage loans on «a primary» considerably more expensiveIn this section you can see the concept of credit, as well as with various types of loans, interest rates on loans for various purposes. Additionally, you can find the best lending terms of banks in Ukraine, see Bank of Ukraine.
Credit - the concept, types and characteristics of the loan
The loan comes from the Latin "kreditum" (loan debt). At the same time me "kreditum" translates as "believe," "trust". From a legal and economic points of view - a loan - a deal, an agreement between legal entities or individuals for a loan or a loan.
With credit loan agreement appears. Under present conditions all the loans issued in the form of monetary credit, and credit relations are part of all monetary relations. The main thing that distinguishes the monetary credit from all other forms of monetary relations - is a reverse movement of the cost.
Currently, the credit is of paramount importance. Credit solves the problems facing the entire economic system. By means of credit can overcome the difficulties associated with the fact that at one site are released temporarily free funds, but on the other there is a need for them.
Credit accumulates released capital, thus, serves inflow of capital, which ensures normal reproductive process. Also, credit accelerates the process of monetary circulation, ensures that a variety of relationships: insurance, investment, and credit plays a big role in the regulation of market relations. The principles of lending are:
* Repayment of loan and maturity;
* Differentiation of credit;
* Availability of credit;
* Payment for bank loans.
Credit: The types of lending
Loan or credit relationship - these are transactions in which one party gives the other the property of any value, on terms of repayment (ie, credit must be returned in the future), payment (ie the use of credit will be drawn interest ) and urgency (ie, the set period of loan repayment). Credit is, in a general sense of the word, the mediation efforts of banks.
Classification of loan is traditionally taken to implement on a few basic characteristics. The most important sign of the credit category are the lender and borrower, as well as the form in which provided a specific loan. On this basis, it should identify the following five forms of credit, each of which, in turn, is divided into several varieties on more detailed classification parameters. Credit serves five main forms:
* Commercial Loans - Commercial loans are called credit provided by a functioning one entrepreneur to another in the form of sale of goods with deferred payment. Commercial loans - one of the first forms of credit relations in the economy, spawned a paper circulation and thus actively contributing to the development of cashless de gentle turnover, finding practical expression in the financial and economic relations between entities in the form of sales of products or services with deferred payment. The main purpose of the loan - Accelerating the sale of goods, and hence, extracting embedded in their profits.
* Consumer Credit - sale of commercial enterprises in consumer goods with deferred payment or provision of bank loans to buy consumer goods, as well as to pay various personal expenses (tuition, medical care, etc.)
* Bank loan - bank loan available cash capital, banks and other financial institutions businesses and other borrowers in the form of cash loans.
* State credit - in the state Loan central government and local authorities have traditionally acted as borrowers, attracting funds to cover budget deficits
* International credit - providing monetary and material resources of one country by another for temporary use in international relations, including and in foreign economic relations. These relations are implemented by providing foreign exchange and commodity resources to foreign borrowers on terms of repayment and interest payments, mostly in the form of loans
These forms of credit differ in the composition of participants, object loans, dynamics, amount of interest and areas of operation. Include the following additional categories of loans:
1. Loans to individuals
1.1. Consumer loans
* Cash Loans for any need
* Credit issued by bank transfer to pay for goods / services
* Loans for plastic cards (credit cards, debit cards with overdraft, revolving cards)
1.2. Car loans - loans to buy cars with or without collateral acquired vehicles (car loan)
1.3. Student loans
1.4. Mortgages - loans the borrower is secured by real estate owned by the latter. Moreover, the object of pledge is in the possession of the borrower, and he has the right to use it on your own. This means that he can rent it and receive other income from its use.
* Loans to purchase real estate secured by the acquired property
* Loans to purchase real estate secured by existing real estate
* Loans secured by real estate
2. Corporate loans
* Trade credit - a commodity loan is designed to meet the needs of people in food production and consumption, which at the time of inclusion in the agreement of the person missing. Commodity Credit loan is a type of consensual, but because the lender to the borrower to transfer responsibility to the things defined by generic characteristics.
* The financial credit - is the money provided as a loan to a legal entity for a fixed term for the intended use and with interest.
* Bank loan - bank loan is one of the most common forms of credit relations in the economy, the object of which appears in the transfer of loan funds. Bank credit appears to be limited to, credit and financial institutions licensed to carry out such operations from the National Bank.
* The interbank credit -
- Loan Overnight - ultra-short-term loan used in the interbank market for a period of days or on weekends - from Friday night until Monday morning.
There is also some types of loans that are issued to both individuals and legal entities:
* Secured Loan - a loan given to ensuring that certain property owned by the borrower.
* Unsecured Loan (blank credit) - providing loans without adequate collateral (so-called "clean credit"). Unsecured loans are usually granted to customers who have close ties with the bank, carrying out all their banking transactions through the bank.
* Lombard credit - short-term loan to a fixed amount provided under a pledge of movable property or proprietary rights.
Lombard credit refers to loans, redeemable at a time. The pledge, which takes the bank issuing the Lombard credit is his. The sum of the Lombard loan depends on the collateral valuation of the property offered as collateral, and from its nominal value, which is determined by an expert.
* Usurious credit - a specific form of the loan in foreign sources is considered only in historical terms, but in today received a certain distribution. Usurious loan right in most countries is prohibited by applicable law. In practice, the usurious loan is realized by issuing loans to individuals and business entities that do not have the appropriate license from the National Bank. Characterized by ultra-high interest rates (up to 120-180% for loans issued in hard currency), and often criminal penalty methods with a defaulter.
* Discount Credit Banks are often willing to take into account and bills. This is one of the oldest and most traditional banking operations. Through endorsement (or endorsers on the instrument). Holder of a bill at the time of registration receives a bill amount minus the discount rate, or discount. Because the holder of a bill gets paid, not waiting for maturity, then it actually receives from the bank loan.
* Loan. Loan - the loan agreement, one party transfers to another property in money or things, certain fungible (ie, those that share common properties for the things of this kind - are measured by weight, number, measure: for example, a liter of gasoline, a ton of wheat, cubic meter boards) , and the Borrower agrees to return to the lender the same amount of money or an equal number of things of the same kind and quality
* Leasing - long-term lease of machinery, equipment, vehicles, industrial facilities maturing debt within a few years. The use of leasing has its advantages, since it does not require the original holdings of large funds.
Credit is given to financial institutions and central banks (banks, credit unions, credit card company) and only under the provision (forfeit bail, guarantee, deposit, pledge, retention).
Credit: repayment schemes
There are two schemes of repayment: normal (differentiated) and Annuity. In the usual scheme of repayment uniformly extinguished the bulk (body) of the loan plus interest is paid on the loan balance. That is in the initial period of payment of the loan outstanding but then they decrease - at least to reduce the amounts allocated for the payment of interest on the loan.
In the annuity scheme, the loan monthly payments are set to be constant. For this purpose in the initial period of the loan share of monthly payment that is used to extinguish the loan principal, established the minimum, but then gradually increased - at least to reduce the debt on the loan and, correspondingly, with decreasing size of interest payments. Financial sense annuity is reduced to move aside for a later period of repayment of principal of the loan principal.
That is why quite often the borrowers prefer it to annuity scheme - in fact in this case, the monthly payment on a loan obtained at the initial stage is smaller than normal lending.
On the annuity can go, if client's income, according to the credit committee of the bank, not enough to cover the first payments on the loan. If the client does not have plans to extinguish the desire to advance a loan, this scheme is optimal. But there is another side to the annuity
Firstly it is more expensive. Let's say a borrower takes a loan for an apartment in a $ 50 thousand at 13% per annum. If the ordinary scheme for 20 years, he overpays 130%, while annuity - 181%. In the money difference is neither more nor less - $ 25.3 thousand credit becomes more expensive due to the fact that the amount paid for the entire term loan interest has increased in 1,3 times. Why? Because loan interest accrued on the balance of debt. And he is in the initial period of declining slower than the differential scheme.
Another disadvantage of annuities is that banks often "strapped" to him a ban on early repayment of the loan. So, if within 20 years earnings change, to pay the loan's body at an accelerated pace impossible - everything is already divided.
The advantages of an annuity is the fact that some banks even offer customers defer payments on the loan for several months. When using the deferred annuity scheme is given mainly on car loans and mortgages. As a result, the client will be exonerated from payment of the loan, for example, every two months a year
Annuity is suitable for small and crediting period - 1-3 years. In this case, the initial loan payments will be smaller, and the overpayment of a loan at low interest rates (12-13% per year) does not exceed 1%
The amount and type of loan, $ Term
years of mortgage payments in the usual scheme of repayment for the year mortgage payments with an annuity for the year
50 000 20 $ 750-725 $ 585
15 000 5 $ 412-382 $ 341