In order to know the meaning of the term bank credit, it is necessary, first of all, to discover the etymological origin of the two words that give it shape:
-Credit comes from Latin, exactly from the verb “credere”. This, in turn, derives from a Latin expression “certum dare” and means “to give the certain.”
-Banking, on the other hand, is the result of the sum of two clearly delimited components: the Germanic “bank”, which is synonymous with “financial entity”, and the suffix “-ary”, which is used to indicate “belonging” or "relationship".
Credit is the money that an individual or an institution lends to someone, setting certain conditions for its return (interest, terms, etc.). Banking , for its part, is that linked to a bank : an entity that provides financial services.
A bank loan , therefore, is one offered by a bank to its clients. In this case, the bank becomes a creditor by delivering a certain amount to the client, who becomes a debtor . The repayment of the loan must be carried out according to the agreed requirements; Otherwise, different types of punishments may be applied.
Suppose a man goes to a bank to apply for a loan. The entity grants him a bank loan of 10,000 pesos with an interest of 15% , which he must repay within twelve months. In addition, it charges you 5% in administrative expenses and forces you to take out insurance equivalent to 1% of the loan. This means that, once this bank credit has been returned, the person will have disbursed 12,100 pesos . In other words: the bank loan will cost you 2,100 pesos (the difference between what you received and what you returned).
In order to get a bank to grant a loan, it will be necessary for the applicant, among other things, to be able to demonstrate his or her solvency. Likewise, you can choose to proceed to present a guarantee, which will be the security that the entity will have to know that it will be able to recover the money it lends in the event that it does not pay the installments that have been established.
In the event that whoever has requested a bank loan does not pay their fees, the following will happen:
-If you have not paid an installment within the established period, what will happen is that you will also be charged late payment interest.
-If there are two installments that have not been paid, the bank will establish that person or company on its list of defaulters.
-In the event that there are three or more credit installments that have not been paid, the bank will proceed to initiate a claim through judicial channels to recover the money that has not been paid.
There are different types of bank loans. Personal loans are those that are given to people, who can request them for different purposes (taking a trip, remodeling the house or organizing a wedding, for example). Commercial loans , on the other hand, are granted to companies . Mortgage loans , on the other hand, are aimed at the acquisition of land or a house, using the purchased property itself as collateral.