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A reminder must be sent the day after the payment deadline. A standard letter, printed by a cheap printer on poor paper and addressed simply to the accounting department, will probably have no effect. Most likely, it will be mistaken for postal waste paper and immediately put into the trash bin.
When accepting an order, you should find out the name, position and address of the person responsible for payment. If it is an international company, then it may be necessary to send invoices to a regional or head office located in another country. Payment reminders must be addressed to the appropriate person. It should inquire if there is any reason for non-payment and ask for it to be reported immediately. In this case, it is better to use fax rather than international airmail.
If your payment is not received within 7 days of the payment reminder, you should call the person responsible for payments. If the answer is unsatisfactory, you need to call the manager who made the order and ask to make payment without further delays. If any excuses, reasons or justifications appear, they need to be dealt with immediately. Sometimes it takes two to three weeks to dispel any doubt, which is tantamount to extending the buyer's credit simply because of the incompetence of the manager.
If the payment does not arrive, further action must be taken within a few days. Procrastination, or rather postponing, will most likely significantly reduce the chances of receiving any payment at all. Depending on the amount and country, you should contact either a debt collection agency or a lawyer.
Loans from a banking institution are one of the most common types of lending, which is characterized by four components: monetary form, urgency, payment, purpose.
That is:
1) Banking institutions provide loans exclusively in cash - national or foreign currency.
2) Obligations under a loan agreement have a predetermined period during which the client is obliged to repay the entire amount of the debt along with interest. Otherwise, the borrower becomes a debtor. Also, the principle of urgency assumes that funds are issued for temporary use and not for ownership.
3) The money that the client returns to the bank at the end of the loan period will increase by an amount in the form of a certain percentage of the loan amount. This is a fee to the bank for the use of its assets.
4) The loan amount depends on goals that the client cannot achieve with his own financial resources. The bank takes measures to ensure that borrowed money is used strictly for its intended purpose, unless it is a consumer loan.
Credit is social relations established between a credit institution and a borrower regarding the transfer of funds from the lender to the borrower in the form of a loan under certain conditions. The concluded agreement specifies provisions such as the amount of funds transferred, the term of the loan, and the lender’s remuneration. For some people, a loan is a vital necessity, without which they cannot imagine a full life, but for others credit is something like a debt hole that they are trying to get around in every possible way. So, let's talk in this article about such an interesting topic and reveal all aspects of the concept of credit.
Credit relationships can take various forms, for example:
Credit relations arise when, at a certain stage of the production cycle, the released value of one economic entity does not enter into new production relations. In this case, the resulting value can be transferred to the use of another economic entity, which needs additional funds and is ready to give more after some time.
Credit performs several significant functions in the economy:
The value transferred from the lender to the borrower can be presented in different forms: monetary, commodity or mixed.
The role of credit is difficult to overestimate. Thanks to this form of economic relations, an enterprise can receive a significant amount of working capital at a time when it is urgently needed due to an unstable economic situation. Thanks to loans, it is possible to ensure a stable increase in fixed assets, which will undoubtedly increase the potential of the enterprise and speed up production.
To the same extent, credit policy affects the liquidity of the banking system.
Initially, it is worth dividing into bank and commercial (transferred from one enterprise to another) loans. The most common types of loans provided by banks are:
All of the above relationships can be divided into target and non-target. Targeted loans include, for example, a loan for education or the purchase of real estate - such relationships have special conditions (both in duration and rates) and require reporting to the lender. Non-targeted loans include loans for urgent needs, consumer loans - including credit on trust - without certificates and guarantors, often with bad credit history- upon presentation of only a passport of a citizen of the Russian Federation (but as a rule, for a not very significant amount, it is usually issued cash).
Another criterion for division may be the provision of guarantees for the return of funds by the debtor. Rates for secured (real estate, car, etc.) loans are lower than for unsecured ones (in the latter case, the rate can reach up to 25% interest per annum).
It's no secret that different banks issue loans on different terms. Refinancing is the process of obtaining a loan on more favorable terms for full or partial payment of an earlier loan. Sberbank, for example, has mortgage refinancing programs.
In contrast debit, credit refers to the right side of accounting documents, which records funds withdrawn from the accounts of the enterprise, as well as the debts and obligations of the organization. Shows a decrease in funds in active records and an increase in passive ones (there is a separate article about assets and liabilities in accounting). In this case, the stress is placed on the first syllable.
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Hello, dear readers of the blog site. Lending is a phenomenon that has become firmly established in the life of almost every modern person.
If there are those who have never taken out a loan in their lives, then they probably heard about this opportunity on TV, from the media and by phone, when they were persistently offered to take advantage of an advantageous offer in SMS and calls.
Today we will look in a little more detail at the lending algorithm, types of loans, as well as the pros and cons of a credit relationship with a bank.
Translated from Latin, “credit” (creditum) means “ loan" This word reflects the essence of the lending process. One party (lender) provides to the other party (borrower) cash loan for a certain period of time. The borrower undertakes to pay the lender the borrowed amount and the agreed commission (interest) within the period established by the lender.
Credit relations arose long before money appeared, back in the days of natural exchange. A simple example: one hunter killed 10 hares. The other one didn’t get anything, so he asked the first one to give him 2 pieces.
He agrees on the condition that in a few days the unlucky hunter today will return 3 birds with one stone. There is a simple lending scheme, i.e. economic relations based on payment and trust.
Credit is economic relations associated with the transfer by one party to the other of any material assets (money, goods) subject to the following conditions: repayment of borrowed funds within a specified period for a certain fee.
Currently, lending most often refers to relationships related to the issuance of a loan in cash (cash or non-cash). And this is logical, because money is the value equivalent of goods and services.
Important: not worth it Confusing the concepts of “loan” and “credit”. Only legal entities can engage in lending, and both organizations and companies are authorized to issue loans.
Credit is the provision of funds, and a loan implies both money and property. The loan is repaid in regular installments over a specified period, and the loan with accrued interest is repaid in a lump sum.
To navigate the world of loans, you need to know what some banking terms mean:
Lending is one of the most important economic tools of any country in the world. Loans can come in several forms; we’ll look at them below.
A clear example when the state (?) acts as a borrower: to cover the budget deficit. In this scheme, the government is the borrower, and creditors are the individuals or legal entities who purchased the bonds.
The essence of this scheme is as follows: the state issues bonds for a certain amount on the securities market, they are bought by individuals and legal entities.
Bonds have a specific denomination and a specified interest rate. After a certain time (approved when issuing bonds), the state pays the bond owner the money previously received from him plus interest.
Let's analyze the lending mechanism an individual in a banking organization:
Every year more and more new banking products appear on the credit market. This increases the influx of new customers and, consequently, increases bank revenues. Let's look at the most popular ones in our country banking loan products.
Consumer is a cash loan for individuals to purchase items (services) for personal use.
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The bank approves the client’s application and enters into a loan agreement with him at a lower percentage, repays the client's debt to the bank where the loan was originally taken out. Everyone is happy: the client pays less, the old bank received its money, the new bank received another borrower.
Advantages of bank loans it is difficult to overestimate:
There is no free cheese, so you need to be aware and about the presence of disadvantages bank lending:
And yet solve the eternal questions: “To be or not to be,” “ To take or not to take", each person has to do it independently. To do this, you need to objectively assess your strengths and carefully weigh all the pros and cons of lending.
Let's consider a short algorithm for obtaining a loan:
A loan is a banking product intended for individuals and legal entities.
It is indispensable for business development, treatment, education and making major purchases. The lending decision must be balanced and thoughtful. Before contacting a bank, you need to objectively analyze your capabilities in terms of repaying future debt obligations.
Good luck to you! See you soon on the pages of the blog site
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Do not rush to sign the loan agreement of the bank you like. 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. As a rule, modern banks like to add all sorts of additional commissions and fees to the agreement, 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 a low loan rate, but in order to cover additional costs they set an increased interest rate for the first or last month.
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 a call back from the manager of the credit institution. 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 is Tinkoff Credit Systems Bank. The rates are slightly higher than for similar products from other institutions, but you can actually get a loan without leaving your home.
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 the service of calculating the effective interest rate on a 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.
In recent years, the procedure for obtaining a loan from a bank has been significantly simplified and shortened. To apply for a loan, you just need to 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 submit an application, simply contact a bank employee for a free consultation. The decision is made from several hours to several days. Small amounts are issued without proof of income, collateral or guarantor. To get a loan for a serious amount, you need to convince the bank of your own solvency or provide valuable property as collateral.
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 selects a convenient option from the list provided). At first glance everything looks very attractive. The price for convenience is a higher interest rate. Less significant disadvantages are the short repayment period and limited amount limit.
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:
Online loans are becoming more popular in our country due to the simplicity of the application procedure and accessibility. Even the main bank of the 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 loans are most often issued to buyers of popular goods. This type of loan also has its obvious advantages:
A mortgage loan is a large amount for the purchase of a home with a long repayment period. A house or apartment registered with a mortgage is used as collateral. Sometimes real estate owned by the borrower is used as collateral.
Mortgage loans have lower interest rates. But the requirements for potential borrowers are very high. Confirmation of a solid income and impressive work experience are required.
In recent years, almost all banks require, as an additional condition, to insure the life of the borrower, the property located in the property, or both objects at once.
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 to the financial institution for the amount lent. 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.
Loan refinancing is a new loan on more favorable terms, which is taken out to pay off an old loan. Refinancing is often called a refinance or a loan on a 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.
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 much 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.
Credit differentiation is one of the features of modern work with the distribution of borrowed funds. 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. To differentiate loans, a well-developed credit rating scheme with solvency criteria and other requirements for potential borrowers is used.
Today everyone is familiar with the word “credit,” but no one thinks about its original meaning. Although, if you ask people what it means, many will put forward their own understanding of this word. For many people, the word “credit” has a very negative connotation and is associated exclusively with bondage, with debt, with a trap, a pit, a swamp, or something else so bad that it must be avoided. Whereas for a huge number of people, a loan is often the only way not only to solve pressing problems, but to start a business, buy a car or housing, and improve their life situation. And, perhaps, no one will argue that a loan should be taken wisely, carefully studying all its aspects in order to be truly satisfied with the result.
So what is credit, how did this concept appear in life and become familiar to everyone? The word credit itself originates from the Latin forefather “kreditum”: which means “debt” or “loan”. Another meaning of this word translated from Latin is “I believe” or “I trust.” Therefore, the word came into use under the combination of these two meanings and adopted the following interpretation in jurisprudence and economics: a loan is an agreement concluded by mutual consent of persons to provide a loan under certain conditions. According to such an agreement, one of the partners acts as a creditor, placing at the disposal of the other partner (borrower) a designated amount of cash or other tangible property with a preliminary agreement on the terms of repayment of the loan. The borrower returns the property in the manner prescribed by the agreement. The agreement provides for a period by which the loan must be repaid in full, or certain dates by which a certain amount of the loan is paid over a long period until the loaned funds are fully repaid. According to the agreement, as a rule, the lessor provides material assets in exchange for cash or other equivalent of the funds issued, plus certain interest as a fee for deferred payment.
If it remains a secret to no one what a loan is, then the general principles on which lending is carried out in modern times are clear to most people. Today, the following lending principles stand out and are common to most:
In addition, there are intrabank lending principles that apply to bank employees.
Based on the principle of loan urgency, any loan issued by the bank must be fully repaid within the period established in advance by the agreement. That is, a mandatory condition for the repayment of the loan is the period before the expiration of which it must be paid in full.
In lending to legal organizations, such a concept as the turnover of loan funds is important, with which the security of loans and their differentiation are inextricably linked. Differentiation implies that different lending conditions can be offered to different clients. The potential borrower must be solvent in order to ensure the principles of repayment and maturity of the loan. For lending to organizations, a thorough analysis of the enterprise’s balance sheet is carried out for liquidity, the profitability of the business at the current moment and future prospects are assessed. Accordingly, if the indicators characterize the organization as reliable, profitable, and potentially developing, it is granted a loan.
Secured loans mean the presence of property that can act as collateral to guarantee financial obligations.
Payment of loans is realized by setting an interest rate for using the loan. Thanks to the implementation of this principle, both parties receive the benefit from the transaction that they need. The enterprise receives the finances it needs today for development, the bank receives money back and funds to provide for other needs, including for its own development.
