When it comes to loan types, a distinction is first made between personal and bank loans. With a personal loan, a private individual grants a loan to another private person or to a company. The difference to a bank loan is that no money is added. The lender leaves the money given as a loan. The lender can charge interest as compensation for this waiver and the risk taken. The bank as the lender, on the other hand, always creates additional money by lending, which means that the bank does not waive in this sense. Nevertheless, the bank also charges interest for the risk and liquidity waiver.
Some important forms of credit are now presented in detail below:
The guarantee credit belongs to the category of loan. In the case of a guarantee loan, the bank provides a guarantee or guarantee for the customer to a third party. In this case, no cash is provided. However, a guarantee commission is paid to the bank for the guarantee.
If a short-term financial need for the acquisition of operating resources is made possible, one speaks of a working capital loan. This loan is used to finance current assets. This includes a company’s assets, which should always be transshipped at short notice, such as inventories, mortgages or receivables from goods deliveries.
line of credit
In the case of a overdraft facility, one also speaks of an overdraft facility for the checking account. The account holder then pays the agreed interest at the end of the month for the amount used. But those are relatively high. In most cases, the credit line is two to three months’ salary.
A supplier can grant his customer a loan by granting a term of payment. This is known as a supplier credit. The credit in this case is that the supplier grants the borrower a deferral of payment over a certain period of time. The credit is secured by the supplier’s retention of title.
There are also so-called installment loans. These include a fixed loan amount. The loan will be repaid in constant monthly installments over the entire term. The installment loan is therefore also known as a consumer loan.
There is also an entrepreneur loan, which is aimed at entrepreneurs and also commercial and freelance entrepreneurs who want to invest in Germany. This loan is used for long-term financing at a fixed and also favorable interest rate.
Instant credit is also particularly in demand. In the case of an instant loan, the customer is informed very quickly about the decision to apply for a loan. A preliminary loan approval can ideally be obtained from some providers within a few minutes. This means that the customer can quickly assess the chances they have of financing from the bank. Such instant loans are generally only issued to dependent workers with a predictable income. However, pensioners and civil servants also have a good chance of getting an instant loan. However, the situation is somewhat different for self-employed and freelancers. For these groups of people, checking the income situation takes more time to see the balance sheets, tax assessments or business evaluations.
There is no earmarking for an instant loan. This means that the borrower can buy a car or a house from the loan. This can also be used to finance travel. The amount the borrower can borrow from the bank as an instant loan depends on the income situation. However, this also differs from bank to bank, which means that no general statement can be made. The security of an instant loan represents the borrower’s regular income. Insurance is generally not required either. In most cases, the interest on an instant loan does not differ from the interest that is charged on loans with longer processing times. So they can be the same for all customers. In contrast, a credit-dependent interest rate can also be offered. Most instant loans have an interest rate that is fixed over the entire term.