What better way to start in the world of finance than by defining a series of basic concepts so as not to get lost in this world of figures.
What is a Credit?
We can define it in the easiest and simplest way; It is a financial operation where a person lends a certain amount of money to another person, who agrees to return the amount borrowed plus interest, which occurs during the period of time in which the loan is in force.
The people who take part in this operation are called Creditor (the person who gives the loan) and the Debtor (the person requesting the loan). Interest is the index used to calculate the profitability of credit, savings or investments depending on the type of financial operation that is being carried out.
Knowing these terms is easier to enter the world of finance. However, the credits vary according to the purpose of their use and the conditions in which it is generated.
There are the credits of type:
Automotive: Aimed at the acquisition of vehicles.
To the consumption: Directed to the acquisition of goods or the cancellation of debts by services; they are usually short-term in periods of 1 to 4 years, these could be defined as short or medium term.
Commercial: Directed to companies of any size, they are usually requested to acquire goods such as purchase of new machinery or expansions that promote the evolution of the company’s economic growth. They also usually request this style of credits to refinance debts or cancel them in full.
Consolidated: In summary, this type of credit meets the characteristics of all types of credit in one. It has several benefits among them the most outstanding is that the creditor will pay lower fee than having several credits separately.
Educational: Aimed at students in order to pay for their studies, the interest that is applied to this type of credit is usually low and very long, to provide greater ease of payment.
Mortgages: These have been very famous, but in reality the definition of this type of credit is; delivery of money by a bank to a private individual for the purchase of a property, a plot of land, the construction of houses, offices or others. The guarantee that this type of credit requires is on the property that is being acquired or refinanced on its value at the time of valuation by the bank. The lapses for payments tend to be medium or long term, between 8 years to 20.
Personal: Aimed at the average citizen for the purchase of goods that are not real estate, the terms that are usually given in this type of credit is short to medium, that is to say between 1 to 6 years.
Miniloans: They tend to be of a low amount and in short terms that do not exceed 30 days; They are easy to request and their approval or denial is quick response.
Having clear the types of credits that exist is easier to decide which request, since it has detailed information and can be evaluated which is more beneficial, depending on the purpose to which the money of the credit will be used.
The credits should be seen as the option to evolution, growth; the opportunity to start a new business or the expansion of a project that is already in operation are just some of the options that can be offered by the credits.
As we have explained before there are several types of credits and surely there is one that suits your needs, it is just a matter of investigating and taking the next step, choosing the credit you need to start a new phase of your life.