Credit
Credit is a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date with consideration, generally with interest. Credit also refers to an entry recording a sum received, listed on the right-hand side or column of an account.
Types of Credit[edit | edit source]
There are many types of credit, including but not limited to bank loans, personal loans, commercial loans, and real estate loans, credit card loans, installment loans, payday loans, and secured loans.
Bank Loans[edit | edit source]
A Bank loan is a type of credit which a bank offers to its customers, based on the borrower's credit rating and ability to repay the loan.
Personal Loans[edit | edit source]
A Personal loan is a type of credit that consumers take out to cover personal expenses.
Commercial Loans[edit | edit source]
Commercial loans are a type of credit that businesses use to pay for capital expenditures and/or operating expenses.
Real Estate Loans[edit | edit source]
Real Estate loans, also known as a mortgage, are a type of credit that individuals or businesses use to buy real estate property.
Credit Card Loans[edit | edit source]
Credit card loans are a type of credit that consumers use to make purchases with a card issued by a bank or other financial institution.
Installment Loans[edit | edit source]
Installment loans are a type of credit that consumers use to make a specific purchase, and the loan is repaid in regular installments over a set period of time.
Payday Loans[edit | edit source]
Payday loans are a type of credit that consumers use to get cash quickly, often to cover unexpected expenses or to bridge a temporary gap between paychecks.
Secured Loans[edit | edit source]
Secured loans are a type of credit that consumers use when they offer up an asset, like a car or house, as collateral.
Credit Score[edit | edit source]
A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual.
See Also[edit | edit source]
- Debt
- Loan
- Interest rate
- Credit history
- Credit report
- Credit bureau
- Credit rating agency
- Credit card
- Personal finance
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Contributors: Prab R. Tumpati, MD
