Surprisingly, there were still people who had never used loans and credit cards. The excitement for these services has subsided over the past five years, and financial institutions are struggling to attract potential borrowers. For those who are going to take advantage of their offer for the first time, some concepts will be new. Let us consider in more detail one of the parties to the loan agreement - the creditor. Who owes this? Or who should? What are the lenders?
Who is a lender?
The concept applies to the side of a contractual relationship that provides material resources for use. Let’s figure out who the creditor is, in plain language. The client comes to the bank and draws up a loan agreement. In this case, the lender is a bank. It provides the borrower with funds.
Another situation - the client organized entrepreneurial activities and takes the equipment for hire from the owner. The owner of the equipment is also considered a creditor. He provided material resources for use.
The lender can be both an individual and a legal entity. He expects the borrower that the debt will be repaid or repaid in full with the interest due to him. The contract does not always imply interest. The interests of creditors must be respected in accordance with the agreement. Otherwise, the borrower becomes a debtor from a debtor.
The concept of a lender is quite broad. It also includes persons whose requirements the debtor - a legal entity - satisfies in the bankruptcy process of the organization. Consider all the concepts in turn.
Factors Affecting the Lender to an Individual
There is a concept - credit history. This is a factor mainly affecting the likelihood of obtaining a loan. The Bank is entitled to request information on the potential borrower, which will indicate what amounts the client used and who acted as the creditor. History clearly demonstrates the integrity of the potential borrower. Will the parties in the obligation become a debtor and creditor over time. When accepting an application for a contract involving collateral, the client’s property value is deducted from the requested amount. So the lender determines the amount of borrowed funds and decides whether the client is capable of repaying them. All the client’s financial savings and investments are taken into account so that in case of unforeseen circumstances there is something to ensure the fulfillment of obligations.
A bank employee has the right to ask what it is planned to spend borrowed funds on. The reason for using the funds is important in assessing the possibility of issuing a loan.
Creditors Rights
The lender is risking his money. In case of default by the debtor, he is entitled to act within the framework of the law, in defense of his own interests. The lender may require early repayment of the debt if the borrower does not pay off monthly payments on time. If fraudulent actions are detected in the loan processing procedure, if the borrower does not fulfill other obligations, he also has the right to request a loan, not taking into account the term of the contract. If the borrower is trustworthy but is experiencing temporary difficulties, the lender has the right to restructure debt obligations.
Obligations of Lenders
This list is small, unlike the list of obligations of the borrower:
1. Provide the full amount of the loan to the debtor within the time specified by the contract and in full.
2. Monitor the performance of the contract in terms of timely payments by the debtor.
3. Remind about the approaching date of the next payment or the delay.
4. If an individual is declared bankrupt, the creditor releases him from all obligations.
For a small business
When accepting an application for financing a client’s enterprise, the lender draws attention to the nature of the business. Is the borrower able to subsequently profit from this enterprise? The application is reviewed from all sides of the administration. The lender needs a business plan and a money back guarantee. The maximum detailed plan of the company’s work contributes to the receipt of funds. Debt repayment options are also accepted from the borrower, but the last word remains with the lender.
The order of work with debtors
In the event of a failed repayment of borrowed funds, the borrower owes his creditors not only the principal debt with interest, but also fines and penalties. From 2015, an individual can declare bankruptcy if he falls under all the requirements of the law.
There are times when a creditor bank and a borrowing bank are one organization.
Bankruptcy of organizations, unlike an individual, is not exempted from paying debts and forms a line of creditors. The debtor is obliged to pay off obligations in the sequence determined by the state. In this case, a replacement occurs. Creditor - who owes it or to whom? In the event of bank bankruptcy, creditors become depositors, holders of funds in accounts and bank employees.
First Stage Lenders
This definition includes persons who have privileges over others. The privilege is the social insecurity of the lenders themselves. Namely:
1. Persons to whom the borrower is liable in connection with the loss of their health or a threat to life. This category of uninsured persons. When a bank is liquidated, these are depositors with a deposit amount of more than 700,000 rubles.
2. Claims that exceed the sum insured from persons insured and subjected to loss of health and life threat due to the fault of the debtor.
Second Stage Lenders
This category includes persons requiring salary and compensation payments in connection with the liquidation of the enterprise.
First-priority lenders have an advantage due to the fact that their claims can be satisfied after the sale of the debtor's assets or at the expense of the state. To fulfill the requirements of the second stage, only the assets of the organization are used, and it is not known whether they are enough to pay off the debt or not.
Current Payment Lenders
It so happens that the debtor has obligations to customers after the start of the bankruptcy procedure. Such lenders have virtually no chance to get their investments. They are not recognized by persons participating in a common cause.
Private lenders
Another type of lender, not related to bankrupt entities. These are individuals who have the means to issue them at interest to borrowers. When choosing a private lender, you should be guided by the reviews and carefully study all the information about him. Pros: it is easier for such persons to get a loan, there is no trouble with the collection of documents, and funds are provided faster. Cons: the percentage usually exceeds the bank, and debtors may not be dealt with legally. Therefore, with private lenders without the feedback of real borrowers, preferably acquaintances, and without extreme need to cooperate with extreme caution.
Finally
In a general sense, the lender is who they owe. Who should (or the borrower) is obliged to strictly observe the terms of the contract. If a bank goes bankrupt, it is a mistake to think that no one else needs to pay. According to the rules, a successor is appointed to whom the debt should be paid. State control over the fulfillment of creditors' requirements is carried out. The same applies to depositors and bank employees who have trusted their savings. In this case, the bank becomes a creditor and pays debts to customers and employees. This is the integration of the debtor and the creditor, who owes and to whom they owe - this is either a bankrupt organization or a private lender.