What does Wikipedia mean by the term lending?

Lending is the issuance of a loan, which is a social relationship formed between entities economic relations when the value moves. Credit relations are expressed in such various forms of credit as commercial credit, bank credit, etc., leasing, borrowing, factoring, etc. Credit implies permission for one person to use the capital of another person.

Wikipedia describes credit and lending as a special form of value relations that arise when the value that is released from one economic entity does not participate in a new reproduction cycle for some period of time. And it is the loan that facilitates its transition from an entity that does not use it (from the lender) to another entity that needs additional funds (to the borrower).

Functions of credit or lending as described by Wikipedia

The functions of credit include: redistribution, creating credit instruments of circulation, reproduction and stimulation.

The redistribution function involves the redistribution of value, which is temporarily released. Its implementation is possible at the level of enterprises, states, industries, as well as the world economy; it occurs on the terms of return of value.

The function of creating credit instruments of circulation is associated with the development of the banking system. Thanks to the fact that it becomes possible to store funds in bank accounts, the development of non-cash payments, mutual obligations are offset, then appear credit funds, not only in the form of circulation, but also as payment.

The reproduction function of credit is manifested in two ways. Thanks to the borrower receiving a loan, he acquires the opportunity to use the capital he needs for entrepreneurial activity (production) and the reproduction of an economic entity (product producer) is carried out. But the various enterprises for which it was produced lending, Wikipedia describes that not only the best, but also the worst conditions for the production of goods for society (price, quality, cost) are realized.

The stimulating function of credit can be observed in the acquisition of the opportunity to develop production without own Money. It is thanks to the loan that such enterprises receive a fairly powerful impetus for their further development.

Forms of credit and lending, as described by Wikipedia

There are commodity, monetary and mixed forms of credit.

In the commodity form of a loan, a certain thing that has specific characteristics is transferred for temporary use. This form existed even before the appearance monetary relations, when goods, livestock, furs, grain, etc. were used as an equivalent in exchange, and entities with surpluses of these goods acted as creditors. Similar property with an increase specified in advance was subject to return. Modern conditions commodity form loans may imply such as: delivery of goods with deferred payment, installment sales, rent, leasing, commodity loan, etc. In some cases, the same or similar property is subject to return, both with and without an additional payment.

In terms of monetary form, Wikipedia means lending as the transfer of a certain amount of money for temporary use. IN modern conditions economy monetary form is considered predominant and is actively used by the state, enterprises or individual citizens, not only within the country, but also in external economic turnover. This form A loan involves the transfer of value for temporary use, subject to repayment after a specified period of time with the payment of interest.

The emergence of a mixed form of credit is possible in the case when the loan is provided in the form of a product and is returned in the form of cash, or vice versa: provided in money and returned as a product. The latter option is often used in international payments, in which cash loans received are settled by deliveries in the form of goods. In domestic economy Selling goods in installments involves the gradual repayment of the loan in the form of cash.

Don't rush to sign loan agreement your favorite bank. Before you take it, try to carefully, without pressure from clerks, study all the features of the chosen program. A standard loan consists of only two parts: the principal (loan body) and the interest part. Usually, modern banks they like to add all kinds of additional commissions and fees to the contract, which they “forget” to indicate in advertising brochures. This is how the third, hidden part of the loan appears, which the borrower also has to repay. Some banks advertise low rate on a loan, but to cover additional expenses set an increased percentage for the first or last month.

Credit application

Modern borrowers apply for a loan not only at a bank branch, but also on the website of the institution they like online. Recently, the popularity of online loans has increased rapidly. To confirm the request, the potential client receives an SMS or the manager calls back credit organization. After this, the money is transferred immediately to or issued at the branch at the specified address. Today in Russia there is one bank that is considered a “champion” in issuing online loans. This Tinkoff Bank Credit systems. The rates are slightly higher than for similar products from other institutions, but you can actually get a loan without leaving your home.

Loan calculator

The loan calculator is a convenient tool for planning financial possibilities and calculating the amount of the monthly payment, taking into account all additional fees. Some calculators even offer a calculation service effective rate on the loan (the real interest that the borrower pays for using the money).

The loan calculator gives an approximate, but at the same time quite clear assessment of the upcoming level of expenses. Thanks to the tool, you will quickly understand how individual calculation methods, interest rates, and loan terms affect the final amount payable.

Bank loan

Behind last years The procedure for obtaining a loan from a bank has been significantly simplified and shortened. To apply for a loan, just take your passport, INN and SNILS with you. Loans are available to any citizen of the Russian Federation who has permanent registration in one of the regions of the country.

To apply, just contact a bank employee for free consultation. The decision is made from several hours to several days. Small amounts issued without proof of income, collateral or guarantor. To get a loan for a serious amount, you need to convince the bank of own solvency or provide valuable property as collateral.

Loan without certificates

A loan without income certificates is one of the types of express loans, for which it is not necessary to attract a guarantor and confirm income using additional documents. The registration procedure takes no more than a couple of hours. The package of documents consists of a passport and any other document (the client chooses convenient option from the list presented). At first glance everything looks very attractive. The price for convenience is increased interest rate. Less significant disadvantages - short term repayment and limited amount limit.

Cash loan

A cash loan is perhaps one of the most popular banking products. These loans have no specific purpose, so you can use them to make repairs, go on a trip, or finally make a long-awaited purchase.

A cash loan has specific advantages:

1. Minimum package of documents for submitting an application.
2. Quick decision-making, mainly in favor of the borrower.
3. In most cases, collateral and surety are not required.
4. Several convenient repayment methods are available.

Loan online

Online loans are becoming more popular in our country due to the simplicity of the application procedure and accessibility. Even main bank Russian Federation Sberbank actively practices issuing loans on the Internet. Before submitting an application, you will need to register on the official website of the institution and log in to the Sberbank Online system.

If registration is successful, just click on “Online loan application” and fill out a simple form. After choosing the type of loan and answering simple questions, your application is sent for consideration.

Consumer loan

Consumer loans are most often issued to buyers of popular goods. This type of loan also has its obvious advantages:

1. Practically instant registration, which takes from 10 to 30 minutes. Borrowers appreciate the opportunity to resolve a financial issue in a short time.
2. Really loyal conditions provision. Insurance contracts, income certificates, guarantors and collateral are almost never required.
3. Repayment is available to anyone in a convenient way. There is an opportunity to pay off obligations ahead of schedule.
4. Registration is often accompanied additional bonuses. The bank offers clients plastic cards, the opportunity to open a deposit under favorable interest rate and other financial products.

What is a mortgage loan?

A mortgage loan is a large sum to buy a home with long term repayment. As collateral property a house or apartment with a mortgage is used. Sometimes real estate owned by the borrower is used as collateral.

Mortgage loans have lower interest rates. But the requirements for potential borrowers are presented very high. Confirmation of a solid income and impressive work experience are required.

In recent years, almost all banks require quality additional condition insure the life of the borrower, the property located in or both objects at once.

What is the loan rate?

The loan rate, which is also known as the interest rate or interest on the loan, is the cost of borrowing money that a bank customer pays financial institution for the amount provided. The indicator is calculated as a certain percentage of the loan amount over a period of 12 months (for example, 15% per annum). Interest is paid in the currency in which the loan was issued. The interest rate is influenced by the loan term and the level of risk that the banking structure allows. The lowest interest rates can be obtained on loans with collateral.

What is loan refinancing?

Loan refinancing is new loan for more favorable conditions, which is taken to repay an old loan. Refinancing is often called a refinance or a loan on loan. Due to legal specifics, refinancing is classified as loans with a special purpose. The signed agreement must contain wording about the need to use the money received to pay off the debt at a commercial bank or other credit institution.

Loan target orientation

The targeted orientation of the loan as a characteristic of the loan gives the bank client certain advantages. For example, getting a targeted loan is much easier. The requirements for borrowers who are allowed to spend on any needs are significantly stricter. Interest on a targeted loan is always an order of magnitude lower. When purchasing real estate or a vehicle, the purchased property is used as collateral. For this reason, the bank’s risks are significantly reduced, and it is willing to relax the requirements.

Loan differentiation

Credit differentiation is one of the features modern work with distribution borrowed money. The concept means dividing borrowers into certain categories depending on their level of solvency, which is confirmed in one way or another.

There are groups of borrowers whose solvency is questioned by lenders. Other categories, on the contrary, have an impeccable reputation and have repeatedly confirmed their reliability. A well-developed scheme is used to differentiate loans credit ratings with solvency criteria and other requirements for potential borrowers.

The uneven movement of working capital is caused by deviations in the actual need for working capital from their standard, which determines the minimum amount of the enterprise’s own funds necessary for its normal activities.

Credit (lat. loan debt) is a complex economic category. A credit transaction based on the temporary borrowing of someone else's property necessitates the financial responsibility of its participants for the fulfillment of their obligations.

A prerequisite for the emergence of a loan is the coincidence economic interests lender and borrower.

Credit is a relationship between a lender and a borrower regarding the return movement of value.

The creditor is the subject of the credit relationship, representing the value for temporary use.

The borrower is the subject of the credit relationship who receives the loan.

The borrower can be a legal entity or an individual.

The mere desire to receive a loan is not enough, so the borrower must provide an economic and legal guarantee of repayment of the loan upon expiration of the loan term.

Economic entities within credit relations can change their economic role, i.e. change places.

Credit functions

• Naturalistic concept
• Capital creation theory

The naturalistic concept interpreted credit as a way of redistribution commodity values. Its representatives believed that a loan cannot constitute capital; it only transfers it from the lender to the borrower.

Proponents of capital creation theory believe that credit not only transfers, but also creates credit capital, i.e. plays an important role in the economy.

In the domestic economy, these two approaches to the essence of credit are reflected in the redistribution and reproduction concept of credit.

The redistribution concept is based on consideration of the content of the loan, mainly as a process of redistribution of temporarily free funds, i.e. supporters of this theory define credit as a redistribution category related to one phase of reproduction, and not to the entire reproduction process.

The reproduction concept is based on the connection between credit and the reproduction process as a whole, i.e. considers credit as a reproduction category, which consists of the placement of funds with the preliminary accumulation of temporarily available funds.

The function reflects only certain features and represents its own specific appearance of the essence of credit as a holistic phenomenon.

There are 2 generally accepted functions of credit:

• Redistributive
• Cash replacement function credit operations

The purpose of the first function is that through a loan, at the expense of the temporarily free resources of some legal entities and individuals, the temporary needs for funds of other legal entities and individuals are satisfied (the redistributive essence is supplied to the borrower for use only for a certain period). A characteristic feature of the redistributive function of a loan is that with its help not only funds are redistributed, but also commodity resources (commercial leasing loan).

The second function is related to the specifics of a modern organization money turnover and its functioning mainly in non-cash form. By placing and storing money in a bank, the client enters into a credit relationship. Credit creates conditions for replacing cash in circulation with credit transactions in the form of records on bank accounts. Depending on what is ahead in time (receipt of the goods and money), either the supplier credits the recipient, or vice versa.

The economic literature substantiates the legitimacy of the following functions of credit:

• Accumulation of temporarily available funds
• Distribution of accumulated funds between industries, enterprises and population
• Regulation of money circulation through substitution real money credit operations
• Saving distribution costs
• Mediation of revolving funds
• Emission function
• Control (stimulating)

Boundaries and role of credit. Lending principles

Like any economic phenomenon a loan has boundaries within which its essence is realized. In relation to economic categories, the border is considered as the limit of distribution of those other economic relations. The credit boundary is the limit of relations regarding the return movement of value (within these boundaries the loan retains its essential features).

The development of credit relations beyond economic boundaries leads to their degeneration and distortion of the essence of credit. The external boundaries of credit relations are their qualitative isolation in time and space from all other relations.

They contain the entire set of credit relations, show the objective limits of their functioning, and the place of the creditor in the economic relations of society.

Internal boundaries show the acceptable measure of development of individual forms of credit (banking, commercial, state, consumer) within the external border of credit relations, i.e. shows the relationship of parts within a single whole.

Creditworthiness is the economically justified credit capacity of a business unit.

The volume of credit investments for various companies has an economic limit, which is based on such a lending principle as repayment. Hence, the properties of the loan imply the need for mandatory repayment of the loaned funds, because The borrower's creditworthiness is limited by his ability to repay the loan.

Due to the fact that the main banking resources constitute borrowed funds, the issuance of the latter on credit is objectively limited, because The bank must return these funds to customers within the agreed time frame. Therefore volume and structure bank loan, i.e. lending boundaries at the bank level are determined by its ability to timely repay its obligations.

The criteria for the liquidity of bank loans (CBs) and their quantitative characteristics are established by the Central Bank in the form of economic standards, because violation of lending boundaries negatively affects the stability of money circulation and can have various consequences.

Role concept economic categories characterize the specific manifestation of their functions in given socio-economic conditions. The role of credit expresses the result of the functioning of credit relations and is determined by the essence of the latter, i.e. has an objective nature:

• The regulatory role of credit, which manifests itself in maintaining the optimization of the proportions of social reproduction.
• Credit is intended to play an important role in ensuring scientific and technical progress (increasing the technical and technological level of the reproduction process).
• One of the aspects of the impact of credit on economic processes is its role in saving circulation costs, in the process of performing the function of replacing cash with credit operations.
• The role of credit is significant in social sphere, increasing the efficiency of social production, loans more fully satisfy the needs of society (growing Credit helps improve the state of the consumer market in accordance with priorities social policy(production of consumer goods).

The following lending principles exist:

the principle of urgency, payment and repayment means that loans provided to the borrower must be paid and repaid within the period specified in the loan agreement.

1. the targeted nature of the loans means that its purpose is determined, first of all, by the borrower himself, however, when allocating a loan, the bank proceeds from its purpose, from the specific object of lending, because Without observing this principle, it is difficult to ensure repayment of the loan within the terms established by the agreement.

2. the principle of material security means that the borrower is obliged to carry out those activities that provide a direct connection between the issuance of a loan and its collateral.

Forms of credit and their definition

The form of credit characterizes the external manifestation and organization of credit relations. Changing their content leads to changes and the creation of new forms of credit.

Signs by which loan forms are determined:

• nature of credit relations (permanent, one-time, episodic)
• characteristics of the participants (subjects) of the credit transaction
• content of the transaction object
• level and source of interest payment for the loan
• material manifestations of a credit transaction (secured loans, leasing, pawnshop).

Bank loan

Bank loan is the movement of loan capital lent by banks for a fee on the terms of security, repayment and urgency.

A bank loan expresses the economic relationship between lenders and lending entities - borrowers, which can be legal entities and individuals.

A bank loan is associated with the accumulation of temporarily free funds, their redistribution on repayment terms, as well as with the issue of banknotes into circulation through the lending system.

A bank loan is the main form of credit. It is provided mainly commercial banks to solve the following problems:

• increase in fixed and working capital
• accumulation of seasonal inventories of goods and materials, work in progress and goods
• when accounting for bills
• satisfaction consumer needs citizens
• redemption of state property
• for other purposes when there is a discrepancy between receipts and non-payments in the circulation of equity capital.

• efficiency
• complexity
• differentiation.

Profitability characterizes the achievement of the greatest efficiency in using a loan with the smallest loan investments. Complexity presupposes a policy that is based on taking into account the patterns of economic development in a certain period.

Differentiation is a different approach to lending individual categories borrowers.

State loan

Reflects credit relations regarding the accumulation of public funds on the terms of repayment for financing government spending, where creditors are individuals and legal entities, the borrower is the state represented by the Ministry of Finance local authorities authorities.

This form of credit allows the borrower (the state) to mobilize monetary resources to cover a deficit without issuing paper money.

State credit is used as one of the measures to stabilize monetary relations, because during a period of inflation, government loans from the population reduce their effective demand, removing excess from circulation money supply, i.e. funds are diverted from cash circulation for a predetermined period.

A bond is a security that certifies the deposit of funds by its owner and confirms the obligations of the legal entity that issued it to reimburse it for the nominal value of this security within the period specified in it with the payment of a fixed percentage.

Treasury obligations - government bills - a type of securities that certify that their holders have contributed funds to the budget and give the right to receive a fixed income during the holding period are placed on a voluntary basis among legal entities and individuals.

When purchasing securities, lenders confirm varying degrees of exposure to the following risks:

• credit
• market
• percentage.

Credit risk is inherent in securities and is associated with the possibility that the issuer's financial capacity will decline so that it will be unable to meet its financial obligations.

Interest rate risk is the risk of changes in interest rates and the associated downside risk. market price. Reason interest rate risk is the fixation of interest on bonds in an agreed manner at the time of their issue and the relative freedom to fluctuate market rates.

Market risk - occurs from the fact that due to unforeseen changes in the securities market (the country's economy as a whole), the attractiveness of government securities as an investment object may be partially lost, so that their sale will become possible only at a discount to a certain extent in a forced ok. Characteristic of internal state loan Ukraine is such a form as NBU lending to the state budget. Repayment of contractual obligations issued by the government and stored by the NBU is subsequently carried out at the expense of the NBU's profits.

Commercial loan

A commercial loan is a credit transaction between two firms (seller-lender and buyer-borrower).

The supplier company provides a deferred payment for its goods, and the buyer company transfers the bill of exchange to the creditor as a certificate of debt and an obligation to pay. Specific date commercial loan depends on the type of product, the cost of the loan, financial condition buyer and supplier, transaction value, long-term relationships between them, level of competition, product quality, etc.

Advantages:

• efficiency
• technical simplicity of design
• the mechanism for mobilizing free commodity resources and their distribution is activated.
• the ability of enterprises to maneuver working capital is expanding
• provide financial support to each other
• promotes the development of the loan market.

Flaws:

• limited in time and size
• presence of risk for the supplier
• strong influence banking sector when accounting for bills of exchange.

Consumer loan

Consumer loan – reflects the relationship between the lender and the borrower regarding lending to final consumption, i.e. it is a means of satisfying the consumer needs of the population and accelerates the receipt of certain benefits that they could only have in the future, subject to the accumulation of sufficient funds.

Issuing consumer loans to the population, on the one hand, increases current effective demand, improves living standards, and on the other hand, accelerates the implementation of inventory and services, contributes to the creation of fixed assets.

In the process of repaying consumer loans, the population's income is reduced by the corresponding amount. consumer demand, which must be taken into account when determining the volume and structure of trade turnover, the dynamics of income and expenditure of the population, and the money supply in circulation.

TO consumer credit refers to pawnshop loans, which provide the population with the opportunity to pledge personal and household items as collateral. The loan amount is limited and determined by agreement depending on the amount and type of things.

If the loan is not repaid within the agreed period and the person evades payment after the expiration of the pledge period, the pawnshop transfers the property for sale. From the proceeds, the storage fee, the amount of the loan with interest on it, insurance costs are repaid, and the pawnshop returns the rest of the amount to the owner.

Leasing loan

A leasing loan is a relationship between legally independent persons regarding the lease of means of labor, as well as financing the acquisition of movable and immovable property for a certain period, i.e. this is the form property loan those. commodity).

Based on the service life and depreciation period of the property, leasing is divided into:

• Operational
• Financial

Operational – transfer of property for a period shorter than the depreciation period. Financial - for the period of full amortization (more losses for the lender and softer conditions for the consumer). In relation to leased property, a distinction is made between pure leasing, when additional costs for the maintenance of the leased object are borne by the lessee (user).

Full lease when Maintenance the object is produced by the lessor (elements of proprietary service).

Relations regarding leasing between its subjects are determined leasing agreement, where are reflected:

• Limits of subjects' rights
• Terms and frequency of payment
• User liability for failure to fulfill contractual obligations
• Assignment of leasing rights

For the use of the leased object, the lessor collects a leasing payment, which must cover the costs associated with the acquisition of the leased object, the leasing rate, and the costs of insuring the object.

Specialized leasing companies, in addition to carrying out all types of leasing, provide intermediary, technical, representation, information, advertising, consulting and other commercial operations.

Mortgage (collateral) loan

A mortgage loan is a special type of economic relationship regarding the provision of loans secured by movable and immovable property.

Borrowers are physical legal entities who have personal ownership of mortgaged objects (private houses, apartments, industrial buildings and buildings, shops, warehouses).

When correlating the pledge agreement, it is necessary to establish in advance whether the given object of pledge was previously the object of pledge in another place.

Banks' lending resources are their own savings, mortgage bonds and borrowed funds. Mortgage bonds - long-term securities issued by banks against collateral real estate and generating solid income (industrial, residential buildings, land).

Basic documents when applying for a mortgage loan:

• Mortgages
• Bills of exchange
• Other securities that may rotate on secondary market valuable papers.

Mortgage is a document that transfers to the lender legal ownership of the collateral for the loan, i.e. this is the basis of security and credit.

Real estate loans are subject to repayment on deferred payment terms and with the payment of interest rates differentiated by banks. A mortgage loan requires the availability private property and above all to the ground.

International loan

International credit is a temporary transfer of goods and monetary resources of some countries for their use by other countries in order to accelerate their socio-economic development.

The need to use this loan is determined by the following conditions:

• Development foreign economic relations between states and companies
• The need to provide credit assistance individual countries.

The subjects of credit relations are states, banks and individual legal entities.

International credit can be used to balance payments between different countries, expanding trade turnover, strengthening economic and political ties with other countries.

Procedure for providing an international loan:

• The loan amount is fully credited to a separate account in favor of the borrower’s country
• The amount of goods supplied is reflected on the credit account
• Loan deliveries are made according to trade turnover through a clearing account
• In certain conditions, with an international loan, the lender requires formalization of leasing.

When repaying a loan and paying interest on it, settlements, as a rule, are made with foreign exchange earnings from increased exports of goods, supplies of goods from the borrower country's range, and products of the companies for the construction of which the loan was issued (other conditions may be specified in loan agreements).

Tax credit

Tax credit – represents a deferment tax inspectorates tax payments for taxpayers for a certain period, if the latter has provided objective justification and economic calculations to provide him with deferred payments (natural disasters, expected high-impact results).

Based on materials from the book "Money. Credit. Banks: Textbook for universities / E.F. Zhukov, L.M. Maksimova, A.V. Pechnikova, etc.; Edited by Prof. E.F. Zhukov" - M.: Banks and exchanges, UNITY, 1999. - 622 p.

The loan can be issued to the state, municipal authority, commercial enterprise or to an individual provided that the interests of the lender and borrower coincide. Required condition— providing guarantees for the repayment of borrowed funds upon expiration of the loan period.

What is lending and how does it happen?

Lending is understood as a system of relationships between parties; it implies the provision by one party (the lender) to the other (the borrower) of a certain amount of funds, which must be repaid over a specified period. Banks, microfinance organizations, pawnshops, and individuals can act as lenders. As borrowers - government bodies, Individuals and legal entities. When executing some transactions, guarantors or co-borrowers may be additionally involved, who bear, respectively, subsidiary and joint liability for repayment of the debt.

Depending on the external manifestation, form and organization of credit relations, established types of loans are distinguished.

According to their purpose

• agricultural;
• consumer;
• industrial;
• trade;
• investment;
• mortgage

By provision

• unsecured;
• with security.

By type of repayment

• repayable in one payment;
• repayable in installments.

By type of interest rate

• with a floating rate;
• with a fixed rate.

Each program has its own characteristics and is accompanied by varying degrees of risks, so lending conditions differ not only depending on the lender, but also on the type of loan.

Popular loans

The lending market is formed based on the needs of borrowers. Today, there are several lending options that borrowers most often use.

Microloans from MFOs

Microfinance institutions provide fast and convenient loans. main reason their popularity is accessibility. You can receive money using a simplified scheme without an income certificate, collateral or guarantors. Many microfinance organizations offer online service lending to a card, which allows you to apply and receive money without leaving your home. Such loans have significant disadvantages - a high interest rate, which reaches 1-2% per day, and a short loan period, which rarely exceeds 30 days.

Bank loans

Banks offer a wide selection credit programs, which allows you to get the required amount for any purpose. Loan terms are among the most favorable. The interest rate ranges from 11-23% per annum, depending on the chosen program.

In addition to traditional loans, banks issue credit cards. Its holder can use it at his own discretion (make purchases, withdraw money in cash, store his own funds). Until credit limit is not used, the borrower does not have obligations, which allows the credit card to be used as a reserve.

To buy an apartment, a car, land plot act special programs. The interest rate on them is 3-5% lower than that of consumer loans, and the loan term can reach 30 years (for a mortgage).

The disadvantages of bank loans include a complex application procedure and high requirements for the borrower, which often becomes the reason for refusal.

Lombard lending

Pawnshops provide loans exclusively against the security of liquid property. It could be household computer technology, antiques, jewelry, and even vehicles. Credit history, the borrower's income does not affect the decision to issue a loan. The pawnshop employees evaluate the collateral, after which the maximum amount available for issuance is announced (40-70% of estimated value). The registration procedure takes from 15 minutes to 3-4 hours. The disadvantage of such lending is the high interest rate (4-7% per month), and the term is usually no more than a month. It should be noted high risk loss of collateral in the event of a breach of obligations by the borrower.

Lending is one of the factors determining economic development. It is a source of investment for enterprises and stimulates production through growth purchasing power population. The state acts as a regulator, implementing monetary policy aimed at increasing the availability of credit and reducing its cost.

What is a loan?

Credit (loan, borrowing) - an amount of money that is transferred by one party to the agreement to another party on the terms of payment (the price is interest), maturity (varies between short-, medium- and long-term loans) and unconditional repayment. Any economic entity can act as a lender and borrower in the process of functioning of the economic system. But the leading place here is occupied by banks: lending is a traditional type of service they provide, the main source of funds for their existence.

What are lending principles?

Principles are the basic rules of any type of activity, recognized as such due to the fact that they express certain causal relationships and are consistently repeated in a large number of cases.

1. principle of urgency: the loan is issued for a certain period

2. repayment principle: within a certain period, the loan amount must be repaid in full

3. payment principle: for the right to use a loan, the borrower must pay a certain amount of interest

4. the principle of subordination of a credit transaction to legal norms and banking rules: in particular, a credit agreement or agreement in writing that does not contradict the law and regulations Central Bank Russian Federation

5. the principle of immutability of lending conditions and provisions of a loan agreement or agreement: if the conditions change, this must be done in accordance with the rules formulated in the loan agreement or agreement itself or in a special annex to it

6. the principle of mutual benefit of a credit transaction: the terms of this transaction must adequately take into account the commercial interests and capabilities of both parties

A special group of principles should include common lending rules that are used if such is the will of the parties expressed in the loan agreement, and should not be applied if not included in such an agreement:

7. principle of targeted use of credit

8. principle of secured lending: the loan can be secured fully, partially or not secured at all

In addition, another group includes lending principles, which are intended for “official use” by bank employees and should be enshrined in their internal documents as an element of credit policy.

Bank lending methods

A lending method can be defined as a set of techniques by which banks issue and repay loans. There are three such methods:

1) method of lending based on turnover;

2) balance credit method;

3) balance method.

When lending by turnover, the loan follows the movement and turnover of the lending object. The loan advances the borrower's costs until his resources are released. The loan size increases as the objective need for the loan increases and is repaid as this need decreases. This method ensures continuous synchronized movement of credit as demand decreases or increases; it is a continuously renewable process.

When lending by balance, the loan is interconnected with the balance of inventory and costs that caused the need for a loan. For example, an enterprise may already purchase the valuables it needs at the expense of its own financial sources and only then apply to the bank for a loan secured by them, thereby compensating for the costs incurred. The loan in this case is issued against the balance of inventory items as compensation, and not as an advance on costs (already incurred in this case) for the purchase of necessary materials. Most often, balance lending, as a rule, narrower, covers a smaller range of lending objects, mediates one of the objects, while turnover lending is associated with the movement of not a separate, private, but an aggregate lending object.

In practice, lending by turnover and by balance can be combined; a turnover-balance method is formed, when a loan at the first stage is issued as the need for it arises, and at the second stage it is repaid within strictly defined terms, which may not coincide with the volume of released resources. At the first stage, the loan is issued at the initial stage of turnover of inventory and costs; at the second stage, it is repaid on the basis of the balance of the client’s urgent obligations to the bank.

The organizational movement of the loan (its issuance and repayment) is reflected in the client’s loan accounts, which the bank opens for him. A loan account is an account that reflects the client’s debt (debt) to the bank for loans received, the issuance and repayment of loans. All loan accounts are characterized by their general design: the issuance of a loan takes place on their debit, repayment - on the loan, the client's debt to the bank is always on the left, debit side of the loan account.

Despite the general unity of the scheme for reflecting debt, issuing and repaying a loan, loan accounts may differ from each other: 1) according to the purpose of opening; 2) in relation to turnover.

According to the purpose of opening, loan accounts can be deposit-loan, when the client receives the right upon exhaustion own funds deposited with the bank to receive a loan in certain amounts. Most often, such loan accounts can be used by the population, accumulating their savings in the accounts and having the opportunity, if necessary, to use a bank loan. It turns from a deposit account into a loan account if the balance on it becomes a debit account.

Loan accounts may be opened solely for the purpose of spending the loan currency. These are a kind of accounts with a credit turnover, with a declining debit balance, a one-time loan received for the purpose of its subsequent use and with gradual repayment of the loan.

In the same class, there are savings-expenditure loan accounts that combine both the movement of funds on a loan and on the debit of the account. For example, a client’s deposit can be systematically replenished with new savings, but their expenditure will always exceed receipts, and therefore the account balance continues to be a debit.

Based on their relationship with turnover, loan accounts can be of three types:

1) turnover and payment;

2) balance-compensation;

3) reverse balance.

These three types of loan accounts essentially correspond to three lending methods: by turnover; by remainder; reverse balance method.

When opening a revolving payment loan account, the client gets the opportunity to pay payment documents for a wide variety of needs: bills for goods and services, checks for wages, payment orders for repayment accounts payable, transfer of taxes and other payments. For all these payments, it is enough to have one revolving payment or revolving balance account, into which certain payments will be received to repay the resulting loan debt.

To make all payments, the client can use a balance-compensation account, but then he needs to open them as many as he needs. A client can have as many balance-compensation accounts as he has private lending facilities. This loan account, compared to the two previous accounts, is less flexible and requires more technical design, at the same time it shows more clearly special purpose loan.

In practice, revolving payment and revolving balance accounts are used for intensive payment turnover, in seasonal industries, trade, agriculture, procurement organizations, continuous, almost daily supplies of inventory and costs. The scope of application of balance-compensation accounts is somewhat narrower; they are used for one-time, occasional needs of clients for additional financial resources.

A special type of revolving payment loan accounts is a current account, which reflects all payments of enterprises; it bears costs both for the main production activities and for the expansion and modernization of fixed assets. This form of loan account is the most capacious; it is opened to the highest category of borrowers with first-class creditworthiness.

The peculiarity of modern lending practice in organizational terms is that it is not built according to a single template, but on a multivariate basis. The bank client himself chooses which form of lending suits him best, which loan account is more appropriate for him to open, and which mode of issuing and repaying loans is more useful to establish.

Principles of bank lending

Bank lending to enterprises and other organizational and legal structures for production and social needs is carried out in strict compliance with the principles of lending, which represent the main element of the lending system, since they reflect the essence and content of the loan, as well as the requirements of objective economic laws, including in the field of credit relations.

The principles of lending include: urgency of repayment, differentiation, security and payment.

The feature that distinguishes credit as an economic category from other economic categories of commodity-money relations is repayment. It is an integral feature of the loan, its attribute, without which it cannot exist.

Urgency lending is a necessary form of achieving loan repayment. This principle means that the loan must not only be repaid, but repaid within a strictly defined period, i.e. the factors of time find concrete expression in it. And, therefore, urgency is the temporary certainty of the repayment of the loan. The loan term is the maximum time for the loaned funds to be in the hands of the borrower and acts as a measure beyond which quantitative changes over time turn into qualitative ones: if the term of use of the loan is violated, then the essence of the loan is distorted, it loses its true purpose, which negatively affects the state money circulation in the country.