The ABC of loans: loans – the most important terms from A to Z | news

A – Annuity, Amortization Credit, Accrued Accrual and Accounts Receivable

An annuity is a payment in which the loan is repaid in equal installments. It is calculated from the repayment and the interest.

The installment loan is a so-called one-off loan that can only be used once by the debtor and must be repaid after it has been used.

Another way of calculating interest is the anticipative method. The interest on the remaining debt is calculated in advance of the period.

If there is talk of the outstanding amount, then the amount due is spoken of.

B – Creditworthiness, suretyship, unsecured credit, balloon financing and bank guarantee

The creditworthiness describes the creditworthiness of the respective potential borrower. The bank thus checks whether other payments are already outstanding, regular income can be demonstrated and how the debtor’s payment flows are behaving.

In the case of a guarantee, the guarantor is equally liable as the debtor if the latter is no longer able to pay his debt. This means that the creditor can request the guarantor to pay in the event of default.

A blank loan is a loan that is not based on any measurable collateral.

Balloon financing represents a special form of repayment flows. In this case, low monthly installments are repaid first and high final installments are repaid at the end of the financing period.

If the bank issues a payment guarantee, we are talking about the bank guarantee. In this case, the bank steps in for the debtor in the event of default if the latter becomes insolvent. The debtor is then indebted to the bank.

D – Loans, overdraft facilities and decursive interest rates

The loan corresponds to the credit. There is a contract between the creditor and the debtor in which the creditor lends the debtor money for a certain period of time.

The overdraft facility is a credit line that kicks in when the account is overdrawn. The amount of the loan is fixed and can be used repeatedly.

With the decursive interest calculation, the interest to be paid on a loan is calculated at the end of the interest period.

E – Effective

The effective interest rate describes the costs to be paid for a loan. The effective annual interest rate is charged as a percentage of the loan.

F – Fixed rate and maturity

In the case of financing that has to be repaid over many years, a fixed interest rate can be agreed with the lender. If this is the case, the interest costs will not change over the agreed period.

The maturity represents the point in time at which the loan granted must be repaid. If this point in time is exceeded, default interest is usually payable.

G – believer

The creditor is the person who can assert an open claim against the debtor on the basis of a contract.

H – Mortgage

A mortgage is what is known as a lien on property, which serves as security for a loan. In this case, the pledge is real estate.

K – conditions, current account credit and credit optimization

The conditions form the framework for a loan, including the amount of the loan, the term, interest and payment periods.

The overdraft facility can be used several times, provided that the agreed period and credit line is adhered to.

With credit optimization, several loans are tied into a bundle, which reduces the total installment to be paid.

L – Leasing

Leasing is a special form of financing that is similar to a rental agreement. In this case, the leased object is made available to the lessee for use in return for a monthly payment. It is not clear whether the lessee will take over the object at the end of the leasing period or not.

M – reminder

If no payment deadlines have been agreed between the debtor and the creditor or agreed deadlines have been exceeded, reminders can be used to demand immediate payment of the debt.

N – net loan amount and nominal interest

The net loan amount is the sums paid out to the borrower.

The nominal interest rate refers to the face value of a bond.

R – installment or installment loan

The installment loan represents a form of repayment in which the loan amount is repaid over a fixed period in a constant amount. The installment is the sum of the loan amount and interest.

S – Debit interest and deferral

The debit interest is the interest payments to be made by the debtor.

In the case of a deferral, the repayment of a loan to be paid is postponed in time. The creditor allows the payment to be made at a later date.

T – eradication

Repayment is the installment of the net loan without interest.

Z – interest

Loans have their price and this is determined by the interest rate.

Henry Ely / Editor finanzen.net

Image sources: BabLab / Shutterstock.com, Olleg / Shutterstock.com

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