Differences between credits and loans
posted by admin
Many people confuse definitions “credit” and “loan”. So, let’s make this question clear.
The first difference is that credits could be given by banks or credit unions only. Loans could be presented by different enterprises, firms, associations, trade and production unions, private entrepreneurs and any usual men.
The second difference is followed from the first one. The right to give credits to natural persons and businesses has institutions, which have obtained the banking license. All other institutions have right to give loans to their partners and clients.
The third difference concludes the question about percents for using strange money. There are strictly prohibition for banks and credit unions to produce credits under 0% per year. The banking percent couldn’t be lower than discount percent of State National Bank. Loans could be given without taking any fees and payments or percents for its using.
The forth distinction is that credit money are transferred in temporary use, but loan money are transferred in own.
There’re listed the main distinctions and differences between terms “loan” and “credit”.