The loan and the bank credit are two similar forms of financing because they allow you to have sums of money on loan but differ in the methods of repayment, the rates, the costs and the amounts that can be requested.
Let’s see together what is a bank credit, what is a loan, the amounts that can be requested, the costs, any guarantees and what is the most convenient form of financing between the two.
What is bank credit
Bank credit is a sum of money that the bank makes available to its customer. Unlike the loan, the customer uses the credit line when he runs out of money in his checking account. However, the account holder is not obliged to use the entire sum made available by the bank but can only use the amounts he actually needs.
Bank credit: amounts due, costs and guarantees
The amounts that can be withdrawn through the credit line , the period and the methods of repayment are established in the contract between the bank and the account holder. However, the credit line usually has a short duration.
Obviously for the bank credit you have to bear costs and pay interest . In fact, there is a fixed commission on a monthly basis and, if the credit limit is exceeded, additional costs must be faced. Unlike the loan, the rates are higher and are calculated according to the amounts actually used.
The bank, before granting a credit line, can also request personal or real guarantees .
What is a loan
Funding is the granting of a sum of money to a private individual by a credit institution. There are several forms of financing, including:
- The personal loan . It can be finalized, ie required for the purchase of a specific good or service, or not finalized, ie requested without having to specify the destination of the amount.
- The assignment of the fifth of the pension . It is an unfinished loan dedicated to retirees and with numerous advantages.
- The assignment of the fifth of the salary . It is an unfinished loan dedicated to public, state and private workers. It has many advantages.
- The loan with delegation . Dedicated to workers who already hold a fifth.
- Debt consolidation . Dedicated to all those who have various loans in progress.
- The mortgage . Intended for the purchase of a property or for renovation.
Financing: amounts payable, costs and guarantees
The amounts that can be requested through financing are variable and depend on the type:
- The personal loan allows you to request from $ 1,500 to $ 30,000
- With the transfer of the fifth of the salary and with the delegation of payment the maximum financeable amount is determined by the liquidation accrued and by the net salary received
- Through the transfer of the fifth of the pension, the maximum amount that can be requested depends on the pension amount and the age of the pensioner.
The costs and interest rates, especially for the transfer of the fifth, unlike the bank credit, are lower and the installment to be repaid monthly is fixed.
As regards guarantees , lenders can request them to evaluate whether or not to grant a personal loan or a debt consolidation.
Better a bank credit or a loan?
After analyzing and evaluating the differences between the loan and the loan, the convenience of the loan is evident for the following advantages:
- It has lower rates
- Lower costs
- Higher demandable amounts
- Fixed monthly installments
- Repayment in installments in the medium and long term
- No guarantees are necessary depending on the type of financing requested
- You can request it in any credit institution without restrictions.
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