Types of bank credits

The types of bank loans are credits that include the various activities of lending money by commercial banks.

All credit calculations, with the exception of current account overdraft and rare revolving credits, currently adopt the 30-day constant banking month convention. It can therefore be said that all these calculations are an approximation to the calculation of the TEG (Global Effective Rate) or TIE (Economic Interest Rate) which is used internally in accordance with the IAS / IFRS international accounting standard, the calculation of which is relies on the reality of the days separating 2 deadlines. However, since 2005, the MJPR 1 method would allow banks to unify the internal and external presentations of all types of credit with a lot of management savings and more flexibility, and without affecting more or less 3 for 5 monthly payments ..

To individuals

Leasing

  • leasing
  • Rent sale

The Leasing or lease is a contract whereby one party (the leaseur) undertakes to provide to the other party the enjoyment of a tangible asset at a specified price, the latter agrees to pay periodically. This type of credit contains a purchase option at the end of the contract. (example: the rental of a car with the possibility of acquiring it at the end of the contract). It is possible to lift the purchase option in return for compensation provided for in the credit agreement.

Consumer credit

List of consumer credits :

  • Credit or loan affected , example: auto loan
  • Purchase on credit or installment sale

Installment sales are defined as any credit agreement which must normally involve the acquisition of tangible personal property (household appliances, vehicles, etc.) and the price of which is paid in installments, in at least three payments, in this case. including the down payment. A deposit of at least 15% of the sales price must be paid to the seller at the signing of the contract. As long as the deposit is not paid, the sale does not exist.

  • Installment loan or personal loan

It is a credit agreement under which a sum of money is made available to the consumer and will be reimbursed by periodic payments. It is intended not to finance a specific purchase but to enable the borrower to meet expenses such as expenses related to family events, medical expenses, education expenses, taxes, renovation, etc. As it is not linked to an invoice for a specific item, the interest rate charged is higher than that charged by the financing of a specific purchase because the bank does not have a real guarantee. (related to one thing) as would be the case for financing a car. The refund is always monthly and the rate of Interest often comes as a monthly load. The interest rate must not exceed the rate of wear indicated by the Banque de France.

  • Revolving credit (or revolving credit)
  • Opening of credit
  • Lombard loan: The Lombard loan is a fixed rate loan backed by investments pledged as collateral. Lombard loans are granted against the pledge of highly liquid assets (shares, loans or certain life insurance policies with surrender value). Lombard credit solutions are aimed at individuals or companies with a heritage purpose. Thanks to the Lombard loan, the assets remain invested and the borrower retains all the advantages attached to them. It allows you to take advantage of attractive investment situations available on the market while maintaining the assets. On the other hand, if the patrimonial values ​​held in the deposit lose value, the borrower must bring in more securities as collateral or accept a corresponding decrease in the amount of the credit.

Real Estate Loan

Real estate loans are defined by the Consumer Code (Article L. 312-1). Primarily, these are loans granted for the acquisition of property, either residential buildings (hence their name mortgage home or mixed-use buildings (professional and residential).

Home loans in foreign currencies are subject to a prohibition in principle, from the st October 2014 2 . This is to protect borrowers exposed by these loans to currency risk (eg income in euros, monthly payments in Swiss francs).

The financing of shares of corporations entitled to the ownership of immovables also falls into this category of credits .

Loans financing repair, maintenance or building improvement expenses are also included in the category, provided that their amounts are greater than 75,000 euros . List of real estate loans

  • Housing savings loan
  • Housing loan
  • Opening mortgage credit generally mortgage

Consolidation of credits

Formerly referred to as “credit buyback”, a legally-deferred term, the credit pooling operation involves the granting of a new loan to absorb a series of existing credits.

It has a legal framework since the Law 2010-837 of July 10, 2010, transposing the European Directive on consumer credit (“CCD Directive”). These provisions are specified by the Consumer Code (Articles R. 313-17 and following).

Long-term credits

These finance the real estate needs of households and are characterized by their high amount, their mortgage guarantee and their duration which can go up to 30 years.

Businesses

  • Operating credit (or cash credit )
    • Commercial discount
    • Opening of credit
    • Overdraft facility
    • Credit Dailly
    • Short-term loan campaign credit covering a seasonal need
    • Financial ticket discount
    • Credit spot loan very short term
  • investment credit
    • equipment loan
    • investment line of credit with draw right
  • Signature commitment (bank guarantee) examples:
    • Tax deposit .
    • Security deposit on public markets
    • Customs bond
      • ..
  • Export credits
    • Advance in foreign currency
    • TCWL
    • Documentary credit
    • letter of credit
  • leasing
    • equipment leasing
    • real estate leasing
  • Others:
  • Factoring Rather a technique of recovering the customer item that can be associated with a cash credit
  • Syndicated loan

According to the duration

  • very short term (up to 3 months),
  • in the short term (up to 2 years),
  • in the medium term (up to 7 years),
  • in the long term (up to 30 years),
  • very long term (over 30 years), even perpetual

According to the form

  • in national currency (the most common case, for example the euro in the euro zone ) or in foreign currency
  • with constant amortization , with constant annuity , or else repayable in fine ,
  • at rates fixed, variable or indexed rate, floating-rate capped or cap (of course : Ceiling)
  • roll-over , permanent or revolving , on line of credit,
  • in account (account receivable, opening of credit , cash facility), on loan agreement , on promissory note, (loan) bond
  • in pool
  • in blank vs. guaranteed.

According to its marketing method

The sale (or “distribution”) of banking products is undergoing a major transformation. This is mainly driven by credits . Borrowers now have several choices.

They can apply to one or more credit institutions , who can make one or more proposals, but limited to their own ranges. They can also get in touch with brokers in loans , legally, the intermediary in banking operations and payment services , which shall analyze the market, but limited to their own agreements with the credit institutions .

The objective is to provide borrowers with better protection and to secure the entire credit sales chain 3 .

Notes and references

  1. ↑ MJPR method on actuasoft.com  [ archive ]
  2. ↑ Laurent Denis | Real Estate Loans in Foreign Currency http://www.village-justice.com/articles/Credit-Products-Credit-Report,17199.html  [ archive ]
  3. ↑ Laurent Denis | Bank Distribution Law http://www.hervecausse.info/Distribution-Laurent-distribution-by-Laurent-DENIS_a923.html  [ archive ]

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