The typical representatives include, for example, the loan agreement or the hire purchase. Basically, a loan is a loan of money, so there is always a borrower who receives the capital and a lender who lends his money. What distinguishes mortgage and mortgage loans? What are the lending criteria for mortgage and mortgage loans? Consumer credit is a credit that is taken out as a private individual (consumer) by a company (usually a credit institution) for purely private purposes.
In the financial sector, of course, the credit sector is a very big topic of conversation, which can be examined from different angles. For example, lending has both economic and business relevance and, of course, is an integral part of everyday life for many people in private consumption.
Basically, a loan is a loan of funds, so there is always a borrower who receives the assets and a lender who lends his. By the way, it is not true that a loan must always contain interest on the loan, nor that a loan contract must always be concluded in writing.
Initially, the entire people’s lending business was dealt with directly, but now the banks are largely lending. From an economic point of view, credit is enormously important because it is only through the distribution of money that it is possible to invest and consume.
If, for example, each individual company first had to save the necessary capital for an investment and every private consumer in order to buy something, economic growth would hardly be possible. A positive side effect for the lender, of course, is that it can generate a return in the form of loan interest rates through lending.
Interest rates on loans
The fact that interest rates on loans always fluctuate is due to the fact that the key interest rates of the EurCen Bank are also used as an economic indicator and interest rates on loans are based in part on these key interest rates of the EurCen Bank. Even for the “average citizen”, the loan has become a matter of course. For example, many Germans use the line of credit as a bank overdraft, conclude a loan on a vacation loan or a new car, or use a home loan loan.
The use of a installment payment by mail order or card payment is another type of loan. Credit is therefore ubiquitous today, without being aware of it.