Any business owner, in order to carry out entrepreneurial and other activities, must have a certain capital, which is sometimes not enough, and therefore there is a need to attract additional funds through lending. Before choosing a specific loan program, entrepreneurs need to select the most optimal offer based on an assessment of their financial capabilities. Which banking product is the most profitable?
Credit institutions specializing in providing a variety of credit products offer many types of lending, the conditions of which are established based on their specific target characteristics of lending, as well as the specific field of activity. Each loan product is usually provided on the basis of an individual credit servicing scheme.
How to choose an acceptable loan offer
When applying for a loan, its recipient, first of all, must decide on the purpose for which he needs additional funds. It is important to consider not only the amount of interest on the loan product, but also commission deductions and other additional penalties. Calculations should not be ambiguous.
There are such credit programs for which fairly loyal and acceptable rates are set, which is very attractive to customers. However, if you carefully read the terms of the agreement, footnotes and appendices to the document, you will find that in fact the loan is not that profitable. Often, by reducing interest on loans, banks try to capture lost profits by setting fees that can increase the cost of the loan by a fairly significant amount. Fees may include deductions for opening a loan account and its servicing, penalties for issuing capital in cash, sanctions for early repayment of debt or for failure to use the remaining limit.
The payment schedule should consist of simple and understandable calculations. It should indicate not only the amount of the principal debt, the amount of monthly payments, interest, but also all the commissions provided for by the loan program. The borrower who has taken out a loan must know the specific date by which funds must be credited to the loan account, as well as what sanctions are provided for failure to repay the debt on time.
Line of credit, features and types
A loan line should be understood as a specific, automatic sequence of credit products. The credit line has two types of its functioning: non-renewable and revolving lines.
A non-renewable line of credit is rational when used for the purpose of making a partial advance, making periodic partial payments, as well as deferring the loan payment. The main advantage of such lines is manifested in investment activities, when a business owner is planning expensive purchases, but does not know about their volume and timing of acquisition. The agreement of such a loan usually contains the term of credit servicing of the account and debt, as well as the size, term and procedure for providing tranches. Funds are credited to the borrower's account in equal installments. When the borrower completely pays off the debt before the expiration of the established period, then in order to use the loan capital again, he needs to complete the transaction again. The schedule regarding the withdrawal of capital is drawn up based on the application of the recipient of the capital. The sampling period can vary in the time range of 6-12 months. As soon as the selection is completely completed, the line is immediately considered closed.
A revolving credit limit is convenient to use when the need for additional capital is associated with constant expenses that are periodic in nature. The main difference between such a loan and a non-renewable limit is that funds are issued only once. A renewable limit is well suited for many types of businesses, particularly those that require unpredictable costs and investments. It would be rational to issue a renewable limit for those individuals who periodically need an insignificant amount of capital. If the client is a borrower under a revolving credit product, then the most profitable way to repay it is to return the borrowed money as soon as possible, which he can use again if he needs to use it again.
Credit line repayment options
Debt repayment can be done in two ways. Thus, the borrower can agree to establish a schedule for each specific payment. Since there are usually quite a lot of such contributions, it is very problematic for banks to monitor the timeliness of all payments. That is why this option of debt repayment is extremely rarely used in practice in the banking sector.
The loan agreement may specify a schedule for reducing the limit capital by inverse proportionality remaining debt. The lender usually sets a maximum amount of debt that may not be repaid on a specific date. When the amount of unmade payments exceeds the established limit, the borrower undertakes to repay the debt to the bank in parts. Payment of interest, calculated on the basis of a specific interest rate, is made every month during the loan servicing period.
One-time loan - its features and terms of provision
Experts recommend taking out one-time loans for making purchases, as well as real estate. If we compare such a loan with other lending programs, then, due to its simplicity of registration and issuance, it is considered the most popular and sought-after type of banking product. The loan is issued by crediting the loan amount to the recipient's credit account, and repayment must be made at the end of the credit period.
Interest on one-time loans is calculated every day based on the remaining debt. The borrower must pay interest for use on the days established by the agreement or other specific time intervals. The most initial commission that a potential borrower must pay before providing loan capital is 0.5-5% of the size of the loan received. In addition, one-time loan programs provide another additional fee, which is charged for early repayment of funds back to the lender.
Debt repayment can be carried out in three ways. Thus, repayments of a one-time loan can be made according to an annuity schedule, when contributions are subject to periodic payment in equal installments. The debt can be divided into equal amounts, consisting of the amount of the principal debt and the interest required for payment, calculated from the balance of the unpaid loan. As a rule, such repayment is characterized by fairly large contributions at an early stage of lending. When an individual schedule is drawn up, interest is paid every month. The calculation is based on the remaining debt. The cancellation of all debt is also carried out according to the schedule.
Advantages and disadvantages of a non-renewable line
The main advantages of a non-renewable limit include:
- - a significant amount of capital available for borrowing;
- - separate commission deductions that are made for a specific payment, which eliminates huge one-time charges;
- - interest accrual, which is carried out on the amount of unpaid payments, but not on the remaining debt;
- - early return of capital, which does not provide for commissions or other charges.
- Negative nuances of non-revolving loan products:
- - additional commission deduction, which is subject to collection in the event that the credit line limit is not claimed;
- - impossibility of repaying the debt according to the annuity schedule;
- - reduction of capital in case of late payment of the previous contribution;
- - debt repayment under an individual repayment program established for each specific payment made.
Renewable limit - pros and cons
Advantages of a renewable limit:
- - sufficiently long term of credit servicing;
- - to receive new capital, the borrower does not need to re-collect documents and go through the registration procedure again;
- - repeated use of credit funds.
The disadvantages of revolving lines include the fact that after the borrower has used the loan funds and paid off the outstanding payments, he again takes a new loan from the same creditor bank. A negative aspect of lending under a revolving program is also the shorter period set for repayment. When we're talking about about significant loan capital, the loan payer may encounter difficulties regarding its repayment.
One-time loan – why it is convenient and what are its disadvantages
One-time loans are credit products that are quite convenient to use for one-time transactions. One-time loan programs allow clients not only to cover the shortfall that has arisen working capital, as well as create all the reserves required for the operation of the enterprise at the right time, but also quickly conclude a valuable deal. Moreover, the payment schedule is drawn up on the basis of phased repayment. One-time loans are provided at very reasonable and favorable conditions, which has a beneficial effect on creating a good loan history.
When the borrower wants to borrow a large sum, he must understand that due to the high interest rates set for one-time loans, he will have to overpay a fairly significant amount of his own funds. Such programs almost always provide for the need to draw up a surety or pledge agreement, various expensive commission deductions, as well as pledging a deposit as a guarantee. To receive a one-time loan, you need to submit a wide documentary package with all important papers and certificates. Quite often, lenders require clients to take out insurance, which, of course, increases and increases the cost of the loan.
Choosing a suitable lending product is not easy, but if you evaluate and analyze the business, as well as the priorities for its further operation and development, you can make the right choice.
In essence, “this is the sale by trading enterprises of consumer goods with deferred payment or the provision by banks of loans for the purchase of consumer goods, as well as for the payment of various types of personal expenses (tuition fees, medical care, etc.).”
Unlike other loans, the object of a consumer loan can be both goods and money. Goods sold on credit, as well as those paid for through bank loans, are durable consumer goods. The subjects of the loan, on the one hand, are creditors, in this case- these are commercial banks, special consumer credit institutions, shops, savings banks and other enterprises, and on the other hand - borrowers - people.
About 1/4 of all consumer credit is provided by banks and 3/4 by specialized credit institutions. But since the latter receive the funds they need to a large extent through bank loans, then in fact 9/10 of the total amount of consumer credit is provided by banks. A consumer loan is repaid in a one-time order or from the settlement payment.
Loan with one-time repayment. This includes current accounts opened by the buyer for a period of 1-1.5 months in department stores and other enterprises retail; within the limits of the loans provided, they buy goods and, upon expiration of the established period, repay their debt in a lump sum.
A consumer loan with a one-time repayment also includes loans in the form of deferred payment (for the services of utility companies, doctors and medical institutions). 2. Loan with installment payment, the bulk of the consumer loan (in the Russian Federation - 3/4 of its total amount) are loans with installment payment. An ever-increasing share of retail trade turnover is serviced through various forms of consumer credit.
Sberik:
1. Loan for urgent needs Features of the loan When calculating maximum size loan, the bank may take into account the income of the borrower’s spouse or other additional income
borrower.
Possibility to get a loan up to 45,000 rubles, up to 1.5 years without collateral.
The interest rate varies depending on the loan term and the security provided for the loan. When collateral is provided, the rate is reduced.
For clients who have taken out a loan from Sberbank over the past 4 years, preferential rates for servicing the loan account.
Interest rate on secured loans:
up to 1.5 years - 15% in rubles, 15.5% in US dollars/euro from 1.5 to 3 years - 16% in rubles, 16.5% in US dollars/euro from 3 to 5 years - 17% in rubles, 17.5% in US dollars/euro
Loans without collateral are provided for a period of up to 1.5 years Interest rate 17% per annum in rubles, 17.5% per annum in US dollars/euro
2. Trust loan
Short period of consideration of the application and issuance of the loan (maximum the next day after submitting the documents).
The borrower has the right to send a preliminary application to the bank for a trust loan orally or in writing (by telephone, fax, e-mail and so on.)
A report on the intended use of loan funds is not required.
The loan does not require collateral.
Provided upon simultaneous fulfillment of 2 conditions:
presence of positive credit history in Sberbank,
the borrower has no debt to the Bank for this type of loan.
Credit term- up to 1 year
Interest rate- 15% per annum in rubles
Amount of credit- up to USD 3,000 in ruble equivalent
3. One-time loan
2. Trust loan
A report on the intended use of loan funds is not required.
The loan is repaid in a lump sum at the end of the loan term. During the term of use, only interest is paid.
When calculating the maximum loan size, the Bank may take into account the income of the borrower’s spouse or other additional income of the borrower.
Credit term- for 1.5 years.
Interestctavka:
15% per annum with security;
17% per annum without collateral;
4. Pension loan
2. Trust loan
Possibility to get a loan without collateral. When collateral is provided, the rate is reduced.
When calculating the maximum loan amount, the Bank may take into accountincomeby place of work and pension
A report on the intended use of loan funds is not required.
Interest rate and loan term
5. Revolving loan
2. Trust loan
A report on the intended use of loan funds is not required.
The maximum loan size is calculated based on a period of 3 years with the actual issuance of loans for a period of 1 year under the general agreement.
Possibility to get a loan without collateral. When collateral is provided, the rate is reduced.
When calculating the client's solvency, the bank may take into account the income of the borrower's spouse or other additional income of the borrower.
Interest rate:
15% per annum subject to registration of security;
17% per annum when issuing a loan without collateral.
Mortgage
Mortgage lending is the provision of long-term loans to individuals for the purchase of housing secured by the property they are purchasing. In order for a mortgage to be carried out, at least three conditions must be met. There must be, firstly, long-term financial resources that can be provided to clients in the form of loans; secondly, potential clients who can confirm that their income is sufficient to repay the loan; and finally, the legal possibility of using housing as collateral. If at least one of these conditions is not met, mass mortgages are impossible: there is either nothing to give mortgage loans from, or no one, or nothing. Today in Russia none of the above conditions are really met.
Let's first consider the situation with securing a mortgage loan. As already mentioned, this security must be the apartment itself. If this is so, then, if necessary, the bank should be able to evict the borrower from there and sell the apartment. It is believed that the ability to evict a borrower in our country is guaranteed by the Mortgage Law, which has been in force since July 1998. This law states that the borrower and members of his family can be evicted provided that they “gave before concluding the mortgage agreement, and if they were moved into a residential building or apartment later - before they move in, a notarized obligation to vacate the mortgaged residential building or apartment in the event of foreclosure on it"
It is clear that this provision does not work. Getting the borrower and his family members to sign such a commitment before issuing a loan is not particularly problematic, but how do you get such a commitment from newly moved in people? What if the borrower says in court that he was really forced to sign some piece of paper, but he has nowhere to live? Will the court in this case violate the citizen’s constitutional right to housing? Moreover, if we remember that the eviction of minor family members is possible only with the consent of the guardianship authorities, who will never give consent to evict a child onto the street.
This problem is supposed to be circumvented by creating a special housing reserve fund to resettle insolvent clients. However, if such housing does not comply with housing standards, then it will not be possible to resettle anyone into it, and if it does, then citizens will begin to take out mortgage loans precisely for the purpose of declaring themselves insolvent and receiving an apartment from the reserve fund for free.
The availability of solvent borrowers is also not easy. In developed countries with extensive experience in mortgage lending, a borrower is recognized as solvent if monthly payments on the loan do not exceed 30% of his declared income. Today, the most common loans are at 15% per annum for a period of ten years. A simple calculation shows that people with an official income of about $2,000 per month can apply for such loans.
These, to put it mildly, are not the poorest people in our country. These are mainly qualified professionals - employees of foreign companies and senior managers of large companies. But the latter, as a rule, do not need loans, and there are not so many of the former, especially in the provinces. At the same time, it is not clear whether it is necessary to show such concern at the state level about the formation of mortgage systems for these non-poor people.
Finally, the third problem is the availability of funds. Fundamentally, all mortgage systems are divided into three large groups depending on what funds are used to provide loans. One of them, let’s call it a bank mortgage, assumes that the bank uses the same funds for issuing mortgage loans as for all other loans, that is, mainly funds from deposits.
Another, the so-called secondary mortgage market system (also known as the American system), is based on the use of funds from institutional investors—primarily pension funds and life insurance companies—for mortgage lending.
Sberbank:
Required documents:
application form;
passport of the Borrower, his Guarantor and/or Pledger (to be presented);
documents confirming the financial condition of the Borrower and his Guarantor (certificate of income)
Gone are the days when a person, in order to acquire a thing he had long dreamed of, borrowed money from neighbors and relatives, because he did not have sufficient funds. And he repaid his debts after a certain period of time in the same constant amount that he took at the time. They talked about inflation only on television, and it never occurred to anyone to demand interest from debtors.
Today, with all the variety of consumer goods, there is still a lack of funds among ordinary people. Only now the “good” neighbors have also disappeared. Therefore, credit institutions (private and public, of course) come to the aid of the modern citizen.
Of the possible schemes and types of lending, perhaps the most beneficial for an individual are considered to be a one-time loan and a consumer loan. Let’s figure out why they are beneficial for people with average earnings!
A consumer loan, as many now know, is issued for consumption needs, that is, for the purchase of something long-awaited, but hitherto unfeasible. Moreover, the amount almost directly depends on the presence and number of citizen guarantors, average earnings and credit history.
You can use the borrowed money to consume whatever you want, without providing a detailed financial report with attached receipts, that is, such a loan does not provide targeted financing.
What is a one-time loan, and what are its significant benefits or differences from its consumer counterpart? Or from any other forms of financial repayment assistance?
Well, let's start with the main thing - currency. A one-time loan is issued in the currency accepted in the country, that is, in relation to our Russia, in rubles.
The amount issued in person is relatively small, so you can’t count on buying a palace with money received through financing such as a one-time loan, with earnings not exceeding the subsistence level. Typically, the amount issued cannot exceed half of the monthly earnings.
The rate, of course, is not small (about twenty percent per annum), but the advantages outweigh the only drawback.
The decision to provide such an amount as a one-time loan is considered quickly, sometimes two days are enough. No guarantees from outside are required, which is extremely convenient (after all, few people really want to guarantee their property or funds for any person).
After a positive and positive decision on the provision, the credit department or institution transfers a one-time amount directly to the account, or gives it to the citizen-borrower in cash.
A one-time loan has a certain peculiarity - it must be repaid (return the money plus interest) at a time, that is, at a time and in one indivisible amount. This is unusual for credit transactions, but it is very convenient for those who do not want to bother about drawing up and calculating the repayment scheme, as well as for those who do not want to split the refunded amount into many small amounts.
Money can be issued by a bank (or other lending department/institution) for a period of up to one year, although most often the funds are provided as a one-time loan for six months.
It should be mentioned that such a loan is not always given for consumption needs; both companies and organizations can receive it. In this case, the money is not given in cash, but is transferred at a time and necessarily to the account of the borrowing organization. Organizations undoubtedly benefit in terms of the amount provided, and in percentage, and in terms, and in conditions, because the income of enterprises is many times greater than the income of an individual. Therefore, such lending is still most popular in production and industry, and also in the service sector.
To summarize the story, let us once again mention the features of one-time lending:
Money is issued directly, one-time, at a time, without guarantees,
The amount issued is small for individuals, but significant for organizations,
You won’t have to wait long for the money (two, maybe three days),
Repayment is made without splitting the principal amount, with the exception of monthly interest payments.
In our unstable times, issuing in foreign currency for a long period of time may not be very profitable for the bank, since in the event of an increase in the ruble exchange rate (deflation) relative to the currency of the loan, it will suffer damage, since usually the interest rate on loans individuals cannot be revised upward. On the other hand, borrowers of loans in foreign currency may simply not be able to repay the currency that has risen in price.
One-time loan term
As a rule, banks do not give consumer one-time loan on long term. Simple practice - one-time loan term no more than 2 years.
As you understand, the longer the loan term, the greater the risk of non-repayment. If urgent needs are easily controlled by the bank through monthly payments, then it is quite difficult for the bank to control the borrower’s welfare through small payments in the form of interest, since the main burden on the payer arises only at the very end of the loan term.
One-time loan term directly affects lump sum loan size. Typically, a one-time loan is limited to 50 times the average monthly wages loan applicant. Everything here is similar to the procedure for applying for a consumer loan for urgent needs, and it is not even necessary to have guarantors. The loan applicant must present a passport and prove his solvency.
Many banks today have websites where you can apply for a loan in advance. By filling out the form, the applicant can know within a few days how much he can count on in the event of a positive decision from the bank.
Currently, the following three main forms of short-term bank lending, established in 1998, are in effect. regulatory documents TSB RF:
on a one-time basis (targeted loans), in this case, the issue of providing a loan to the borrower is decided each time on an individual basis;
One-time (targeted) loans
Most common in modern conditions Russia are short-term targeted loans. Their terms do not exceed one year, are provided to borrowers on a case-by-case basis and serve specific business transactions.
Based on their intended purpose, loans can be divided into:
- production goals;
- trade and intermediary operations;
- temporary needs.
Borrowers of targeted loans can be enterprises (firms) that do not have a creditor bank. However, since the bank’s risks in this case increase significantly, banks may require opening a current account with the creditor bank.
Loans for production purposes
Loans for production purposes are associated with borrowers obtaining loans to finance the purchase of raw materials, storage of finished products and production costs. If the loan is related to the accumulation of inventory, the bank can provide the borrower with a loan in a certain amount of the amount of goods in stock.
To receive a loan, the borrower client must submit to the bank each time required package documents:
- loan application;
- financial statement, including balance sheet and income statement;
- feasibility study, etc.
In this case, each loan is formalized by an individual loan agreement indicating the purpose and amount of the loan, the repayment period, the interest rate and collateral. Targeted loans are issued from a simple loan account at a time with the loan amount being credited to the borrower's current account. A borrower can have several simple loan accounts with a bank if he simultaneously uses a loan for several lending objects, issued at different times and for different periods.
Loans for intermediary operations
Loans for trade and intermediary operations are also short-term in nature and most often associated with the emergence of a client. The borrowers are wholesale and retail enterprises. The peculiarity of these transactions is that in addition to the above documents, the borrower submits contracts for the supply of products to the bank.
Loans for temporary needs
Loans for temporary needs are provided for paying wages and making payments to the budget, i.e. also serve for satisfy the client's short-term needs for cash . Loans for trade and intermediary operations and for temporary needs are issued according to a scheme similar to lending for production purposes.
Repayment of targeted loans occurs by debiting funds from the borrower’s current account, either in a one-time one-time payment at the end of the established loan period, or periodically at a time agreed with the bank and in the appropriate agreed amount.
At the borrower's bank request, the loan repayment period may be postponed (extended). In this case, an additional agreement is drawn up to the loan agreement.
If, upon the maturity date, there are no funds (or not enough) in the borrower’s current account to repay the loan, then the entire amount (or part of it) is transferred to the overdue loans account.
