Difference between a loan and a CC
13 October 2009Both loans and credits to cover the request financial or economic needs, whether buying a commodity or the purchase of various services.
Between loans and credits and there are substantial differences are also different contracts.
A loan is a transaction in which a financial institution delivery to an amount of money that must be repaid with periodic payments and adding a range of interests.
In a consumer credit may be providing the money the credit provided by the financial institution. The customer withdraws money in as you need without exceeding daily limits or the total amount specified in the contract. The contract should specify the duration of the loan and once defeated, it can be renewed if specified in the contract and the financial institution allows.
For these money provisions, the customer must return the amount of money used, interest and bank fees agreed in the contract. It is possible that the consumer can repay the amount of credit provided before maturity, either partially or completely. Even so the client can return to your credit money during the term of the contract.
The customer may have the amount of bank credit in your own checking account, where the rules and scoring will to be making withdrawals.
These are some of the differences we find between a loan and a credit
1 .- Interest on loans and credit
Interest on a loan affect the total money given by the financial institution, while a credit is paid only interest on the capital and not ready for the full credit given or loaned.
2 .- The money granted or paid.
In a loan the lender delivers the total amount awarded at the time of finalization of the contract. However, in a credit the customer will use the capital as needed to the ceiling agreed in the contract.
3 .- Period of return or fees
In the credits, capital can be renewed in one or more occasions after the deadline. In the case of borrowed capital loan must be repaid within the agreed timeframe.
4 .- Flexibility
Credit is more flexible than the loan because the consumer may have during the contract period the amount it sees fit and pay interest only on the capital ready at all times. Unlike credit, loan, customers receive all the capital at one time and the beginning of the contract.
