In modern conditions, bank lendingbecomes an important tool aimed at improving the quality of life of the population and the development of economic entities. Indeed, the activities of credit institutions can get the desired here and now, even when the required amount is not available. Often, bank lending creates the basis for the implementation of state programs that have important social significance for the region.
Since any loan is based on the principlepay, then any bank accrues interest on the body of the loan. There is a relationship between the loan term and the interest rate, that is, the longer the loan period, the higher the percentage. Short-term, long-term and medium-term loans can be singled out for this criterion. Of course, to get a loan for a long time, you will need good reasons and objectives, since the risk of non-return of funds is increasing. That is why the interest on such loans is much higher than all the rest.
Depending on the purpose and purposeuse distinguish consumer, trade, budget, agricultural loans. Among individuals, the most common type of credit is consumer, because to receive it does not require additional action. As a rule, for this purpose a contract is concluded between a particular store and a bank, so it will be quite easy to arrange a loan to a client.
Bank lending is risk-based, andThe task of the management of this type of organization is to develop measures to reduce this indicator. Any loan is issued for a certain security, confirming the solvency and financial stability of the client. As such security may be a guarantee, a pledge or a surety. The property of an individual or fixed assets of an economic entity is often taken as a pledge. The guarantee presupposes the presence in the transaction of a third person who assumes responsibility in the event of a non-return of funds in full or in part to pay off the debt of the borrower. Unsecured can only be a credit outstanding for consumer purposes.
Bank lending to legal entities usuallyis carried out in the form of a revolving credit line. That is, the bank enters into a contract with an economic entity to provide it with cash on demand and in the required amount, until the established limit is reached. After that, the borrower has the right to extend the credit line, having previously agreed this with the bank that is serviced by him. In our country, this method of reimbursing the temporary shortage of financial resources in production activities is only gaining momentum and is in the process of development.
Bank lending to individuals allowsconceived in the shortest possible time, even in the absence of savings. Unlike the practice of foreign countries, domestic banks work more with legal entities. This is due to distrust of the entire banking system on the part of the population due to numerous bankruptcies in crisis periods.
We can note the most important advantage thathas bank lending. It consists in the right of free choice of the client, the system of issuance and payment of a loan. In addition, there is no need to deduct taxes from the loan amount. And the interest rate can be considered as a perfectly fair reward for the riskiness of the operation. Of particular importance is lending for legal entities, as it maintains the continuity of the enterprise, because at the expense of borrowed amounts, the temporary shortage of financial resources is being filled.
