What is the difference between loan and credit

The main features of credit and loans

Loan provide banking institutions on certain conditions, among which stands out the urgency of repayment. This implies that if you decide to borrow from a Bank, then you definitely will need to return the money, and in due time and to pay for the provided service percentage, which is a cash Commission banking institution.

Based on this, between the banking institution and the natural person or legal entity concluded a contract, which is prescribed for how long is the amount of money how the debtor will pay and which will have to pay interest.

It is worth noting that if the debtor fails to return the funds in full, the credit institution has the right to forcibly remove them from him. In this case, the credit institution may hold lost profits, because the refund amount eventually could be transferred to another person on paid conditions.

The loan is the object of economic relations between entities in which money, clothes or any goods given by a lender to a borrower on specific terms of repayment. The debtor needs only to return the transferred money funds or things the lender to the extent in which they were received. Also, the loan agreement can specify the time for which the transferred property, but the item of interest may not be. In other words, the loan agreement could be interest-free, and the Board itself for the use of the product can be expressed as a percentage or a specific fixed number.

The loan and the loan have the similarity in that the transferred property will be returned, that's only if the loan it can only be cash, and the loan of items, products or goods. In addition, credit always involves a payment to the lender, which is expressed as a percentage, and the lender may not obtain a certain amount of money for the transferred property.

Thus, the difference between the loan and the loan contains the following:

• According to the credit agreement for temporary possession and use are always sent money, and the loan agreement – not only cash, but also other valuable items, property or goods;

• Loan means a period for which the money is transferred for temporary use, they are returned in equal parts frequency and the loan agreement might not reflect the term of repayment.