The loan, credit, loans - many minds do not see any difference between the two, believing that all this is about the same thing. The essence of vision about this: someone has someone in debt funds or other assets, and after some time returned to him, as a rule - the payment of interest.

However, experts hold clear distinction between the terms “loan”, “credit” and “loans“. In this article we’ll talk about what constitutes a loan and what is its economic nature.

In general, the loan means the transfer of ownership of funds or other assets from lender (the so-called grantor loan) to the borrower (the so-called person has received a loan), subject to later return after a certain period of time. And the subject of the loan (so commonly called referred to the debt of money or other assets) should be returned in full, as if it were the thing - they should be in the same quantity and quality.

In civil law for the registration procedure of the loans agreement provided for a loan. By the way, few know that the first-ever loan agreement was drawn up very, very long time - in the 5th century, thanks to the efforts of the Roman jurists. Despite external simplicity, this document correctly reflects the essence of place: according to him, though, getting a loan, obliged to return it to lender fully specified in the contract period.

A characteristic feature of the loan as a variety of legal relations is that the borrower becomes the owner of the loan for the duration of the use of the loan, ore received money or other assets he is entitled to dispose of at their discretion. So, for example, in the event of loss or damage received by the loan agreement the borrower must return the items to lender similar in quality and the appointment of things in the same quantities in which they were provided in the form of a loan. The transferred to the loan agreement or the value of things should have a replacement. They may not be unique, exclusive, unique, unique, etc.

Speaking in simple terms, in the form of a loan, you can send the following, for example, things: food, fuel, tools, construction materials, etc. But values such as unique jewelry, a collection of rare cognacs, the original of the famous sculptures and paintings, etc. may not be the subject of a loan, because in case of loss to recover damages would be impossible.

Another distinctive feature of the loan is that it, unlike most credits, is free. If the loan is granted at interest, the loan contract with no pay to lender not anticipated. To a large extent this is due to the fact that between the borrower and lender exist if not close, then a trust relationship.

It should be noted, and another opposed loan from the loan: In the first case, the transfer of money or other assets is carried out without the involvement of a financial intermediary, which in the second case is a bank or other financial-credit institution. The bank, in essence, is a place where the other person who has the money and wants to get this benefit (as interest, dividends or other payments), called the investor and the person does not have the money, but wants to get them into a loan (the borrower).

Another loan is a loan from the fact that the loan agreement may be transferred to the ownership of money and other assets, and the loan contract, you can send only money, not property, but only for temporary use.

This entry was posted on Thursday, February 26th, 2009 at 12:55 pm and is filed under Developments in payday loan industry in Canada.. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.