The difference between credit and loan
Unless you have some financial literacy, probably every one of us have occasionally confused the terms ‘credit’ and ‘loan’. Surely we have used them without knowing the distinction between them, and we’ve said”I have to borrow” or “I will ask for a loan” believing that they mean the same. The truth is they are very different, and we should be clear about a few concepts on credits and loans:
# In the loan the bank makes available to the customer a fixed amount of money and the customer becomes liable to repay that amount plus a commission and interest on the agreed deadline.
# In the credit, financial institution put at the disposal of the client in a credit account the money that is needed to a maximum amount of money.
# The loan is usually an operation in the medium to long term and the amortization is usually done through regular payments, monthly, quarterly or semiannually. Thus, the client has the opportunity to organize themselves better when it comes to planning the payment and personal finances.
# Generally personal loans are granted to individuals for private use, therefore, usually require personal guarantees or collateral (pledges or mortgages).
# In the loan ,the granted amount enters the customer’s account and you have to pay the interest from day one, calculating the interest on the amount that has been granted.
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