What loans exist on the financial market?
Bank and non-bank loans
The most common form of loans and credits is the bank. However, some bank clients do not always reach credit because of strict conditions: the client has to document the income and balance of payments in bank and non-bank registers. Non-bank institutions provide loans under less stringent conditions, but virtually always with higher interest rates.
Mortgage credit can also be an investment in certain circumstances. You can borrow for an apartment that you rent. And from this income you repay the mortgage. At the end, your apartment is yours and your tenants actually paid for it.
A mortgage or mortgage loan is a kind of loan, but very specific. There are special purpose mortgages that are used to finance housing, whether for purchase, construction or renovation. But there are also non-purpose mortgages that you can use for other purposes without having to document your use. Not surprisingly, this option is again more expensive than when you prove everything. Whatever your mortgage, the bank will always pledge the property .
In fact, credit cards are pre-approved loans at any time. If you start to draw them, you have to pay a certain minimum monthly amount. And at that moment you start paying interest and various charges for its use. The cheapest option to use a credit card is to repay everything in the interest-free period. This usually takes 30 days.
An overdraft is a pre-approved loan on your current account. It can range from a few thousand units to hundreds of thousands. You pay for what you use – fees and interest. For some overdrafts, the rule is that you must repay the entire amount once a year. Elsewhere, you only need to pay interest. Have you calculated how much this fun can cost you annually?
Always calculate in advance how much the loan will cost you. This will prevent many unpleasant surprises (Photo: David Pereiras, ShutterStock.com)
The way you can finance a new car, but also other movable property. Classic leasing has a big difference compared to a loan, the car is owned by the leasing company until you fully pay it off. There is also an operational lease: You pay for the use of the car and all service is provided by the leasing company. Such a car is not yours, nor will it be at the end of the contract period. As a result, you only pay the difference between the purchase price and the price the car has when you exchange it for another, that is, when your contract ends.
Loans from individuals
Natural persons can also borrow money. Always be careful under what conditions you borrow money from other people. Always insist on the contract and all terms and conditions in writing. And you’d better discuss the deal with someone who understands the matter so that you don’t fly to a cheater who wants to deprive you of the property you own or the other pledge you give over the loan. As a debtor, you should keep track of all creditor terms.
Peer-to-Peer Loans (P2P Loans)
New in recent years. Peer-to-peer money lending is based on a simple principle. People don’t borrow from banks but directly from people. And thanks to a mediator who is a company that manages all matters and takes care of the security of investors and clients who apply for loans. It can happen that fifteen people can put you on the new laptop you need for work or study. And since their willingness to lend you money, the amount of interest is also unfolding. The more people trust you and want to lend you money, the cheaper the loan is for you.