A loan (derived from the Latin credere “believe” and creditum “the person entrusted to good faith”) is the taking out of a debt with delayed repayment. In Switzerland, a loan is also called a loan.
The classic understanding of “credit” extends the term somewhat – beyond the pure legal relationship. In other words, “having a credit” meant “having something” in the sense of enjoying trust that you are solvent and therefore creditworthy. Example: The overdraft facility of a current account is a loan in the broader sense, a sign of trust, as long as it is only “granted”. If the overdraft facility is actually used, a loan in the (narrower) sense of a legal relationship arises, a loan.
Banks lend money in the form of loans (personal loans or small loans), which bank customers (non-banks) made available to them in the form of deposits. Loans can also be taken out from central banks for refinancing. Commercial banks always create money by granting loans. Lending a commercial bank must be covered by deposits and capital of the bank. Various regulatory requirements of the Astro Bank and the Best Bank have to be met here. When lending, a bank adheres to financing rules, including the golden bank rule, to minimize its financing risk.
From comparing the cheapest loans on the market to making the money available from the credit institution, the following nine phases are typically performed.
The borrower generally takes out the loan from a bank, savings bank or other credit institution. The latter generally expects collateral in the value of the amount taken up or a large part of it in one of the following forms:
A borrower receives money with the obligation to repay the borrowed amount plus interest at the agreed time. The loan interest is usually stated as annual interest and in percent per annum (“% pa”).
The private borrower receives the best interest by making a loan comparison.
There are also interest-free loans – especially for start-ups and publicly funded construction projects. As part of various funding programs from the European Community, the federal government, the federal states or municipalities, the borrower can also take advantage of interest subsidies or subsidies.
The interest rate mainly depends on