Credit is a form of movement of loan capital or money. Forms and types of credit are closely interconnected with its structure and essence.
No matter how the relationship between the borrower and the lender regarding the lent value changes, the form of the loan is a reflection of the content of the loan as an economic category as a whole.
Types and forms of credit have gone a long historical development path, from usurious loans to modern bank loans.
Production relations that develop when the value is transferred to each other for temporary use by economic entities, the state, organizations or individuals on a repayable basis are expressed through credit. Regardless of what the forms and types of loans are, the essence of the loan should be reflected in them . Credit has become an integral part of economic development.
The main forms and types of credit
The commodity form is used in such cases as rental of things, sale of goods by installments, rental of property, including leasing of equipment. Moreover, the borrowed funds in these loan transactions must be provided and returned in the form of commodity values.
The monetary form is the most typical and prevails in the modern economy. This loan must also be repaid in money so that the transaction has the appropriate form.
The mixed form is more often used in developing countries when they periodically pay for money loans by deliveries of goods, say, raw materials or agricultural products.
The forms of credit are also distinguished by the target needs of the borrower. This is mainly productive and consumer.
The latter is used for the purposes of circulation and production.
The consumer form, in contrast to the productive one, is used by the population for consumption. Since a new value is not created at the expense of a consumer loan, besides individual citizens, enterprises that “eat up” the created value can also receive it.
Distinguish forms of lending also depending on who acts as a lender.
Bank loan
This form is based on the use of only cash capital, while the bank:
- operates, as a rule, with more attracted resources than with its capital;
- lends to unoccupied capital;
A bank loan is issued for a loan interest, which is determined on a mutually beneficial basis by the subjects of credit relations and consolidate it in the loan agreement.
Commercial loan
It is issued during the execution of a trade transaction in commodity form and is issued in the form of a bill, a debt obligation, which is paid through a commercial bank. Currently, the functions of the bill often performs the standard contract. Commercial credit has fundamental differences from banking:
- the role of the creditor is not a specialized credit and financial organization, but any legal entity related to the production or sale of services and goods;
- provided in commodity form;
- the fee for this loan when making a transaction is included in the price of the goods, etc.
Forms and types of loans differ in the detail of its characteristics according to organizational and economic characteristics, which is inherent in types of loans. In Russia, they are classified based on the following indicators:
- the stage of reproduction serviced by a loan, say, a loan for new means of production ;
- lending facilities, for example, for the purchase of various goods;
- industry focus:
- its security:
- by nature - with direct and indirect security;
- according to the degree of security - without security, with sufficient (full) and insufficient (incomplete) security.
- loan urgency:
A variety of forms and types of credit allow it to be used by both large enterprises and small production and trade structures, the state and individual citizens.