The system of lending in Russia is developing at an impressive pace, and therefore at present banking institutions offer a huge range of services, which include: the organization of sale and purchase of currency and securities, loans and deposits, etc.
People when they contact the bank, sometimes just do not notice any difference in those or other products of banks, for example, how a loan differs from a rural development mortgage loan
Although these services are almost identical, they still have their own individual characteristics.
Mortgage – a form of bank lending, in which the issuance of money is for the purchase of certain housing.
Based on the contract, the acquired property is transferred on bail. This property is a certain guarantee for the solvency of the borrower and is secured for the duration of the loan.
In other words, if there is a situation when, due to changes in the financial position of the borrower, he will not pay interest and principal on the loan, then the pledged property will be sold, and the necessary part of the money will go to pay the missing amount of the rural development mortgage loan
A loan is a certain form of a relationship in which one party (the right holder) transfers to the second party (subject) the free value in economic jurisdiction.
In other words, this means that the creditor who has the goods or money transfers them to another with a condition of recompense.
Hence we can conclude that, according to the contract, the borrower is obliged to repay the loan in full with interest and at a certain date.
Comparison of two operations.
According to the above, we can safely note that the rural development mortgage loan
is nothing more than a special-purpose form of lending.
A loan provides for use with the condition of return not only money, but also goods. In this case, it happens without a mortgage, and with a mortgage, but both these cases imply a payment by the borrower of certain interest, which is specified in the loan agreement.
Mortgage just acts as a loan for the purchase of real estate with its mortgage, one of the main conditions of which is the timely return of borrowed funds.
What is the difference?
In conclusion, we summarize how the mortgage differs from the loan, for this we draw a comparison of them in the main aspects:
– Financial institutions usually issue mortgages on the security of the purchased housing, and the loan is issued as a pledge (in its quality, not only real estate, but also other property can act) and without it;
– Credit is a more extensive concept in comparison with a mortgage, since the latter is only one of its forms;
– a loan is issued not only by banks, but also by business entities to each other, and rural development mortgage loan
is exclusively a service of the bank;
– a credit object can be either goods or objects, and money, and a mortgage – an exceptional provision of the necessary amount for the purchase of housing.
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