What is meant by credit in loans? Credit concepts

In credit we manage that money by providing or withdrawing money and income or returning it, attending to our needs at all times.

In this way, we can cancel part or all of the debt when we see fit, with a consequent deduction on interest payments.

In addition, for allowing us to have that money we pay to the bank a commission, and also interest according to agreed conditions. In only credit interest on capital employed is paid, the remaining money is at our disposal but without necessarily having to pay interest. Reached the term of maturity of the credit we can re-negotiate its renewal or extension.

The purpose of the credit is to cover expenses, current or extraordinary, at specific times of illiquidity. The loan usually involves opening a checking account. credit accounts and credit cards: two types of credit are distinguished.

It is quite common to use the terms “credit” and “loan” as if they were the same, but the fact is that are many differences between credit and loan.