Credit expansion is one of the types of monetary credit policy whose essence is to increase profitability by expanding areas of influence and enhancing banking activities. The word itself means "expansion or distribution." These values are decisive for the whole process, whose main goal is the struggle for a profitable market for services, investment and raw materials. Most often we are talking about the result of the policy of the state, which is trying in this way to act on its economy for profit.
Features
Credit expansion is a policy that can be implemented through real accumulation. In this case, it is aimed at providing loans, the service is quite widespread, while the range of products that are offered on the market is expanding.
The opposite of this process is the issuance of debt instruments. This type is called fiduciary. At the same time, the issued security turns out to be unsecured. In other words, lending is curtailed, and the expansion itself is carried out through borrowed funds.
When is credit expansion useful? This is a policy of expensive money, it limits emissions and constrains lending. It aims to stimulate the release of cash and increase profits through increased activity of the banking sector.
Methods
The main goal of credit expansion is the struggle for markets that bring maximum benefits, areas of capital investment and sources of raw materials. The following methods of its implementation are distinguished:
- External expansion is carried out through investments of private and state capital abroad, the provision of export credit, export premiums, currency and commodity dumping, as well as insurance of export transactions of institutional private units against currency, credit, interest, and portfolio risk.
- The internal method of pursuing a credit expansion policy is, in turn, aimed at regulating the economy and accelerating the rate of economic growth. It includes lowering official rates with expanding limits on pawnshop and accounting operations. In addition, it is possible to change the reserve standards of credit organizations or purchase securities in open markets, and at the same time expand purchases from commercial financial organizations of foreign currency and lower the interest rate on them. This process involves the abolition of quantitative restrictions on credit to stimulate economic activity.
Thus, credit expansion is an intensive way to expand credit transactions in order to make a profit.
How to get a loan at a low interest?
Interest on loans depends on many conditions. Basically from the requested amount and terms of return, as well as from the pledge or guarantors. If the latter are available, the rate will decrease, and from the first two points it will directly increase. Are there any recommendations on how the client can get the lowest interest rates on loans? Of course, they are well known:
- It is necessary to choose only large state banking institutions with transparent tariff systems.
- It is necessary to prepare documents from work in advance.
- You can not get express credit in stores, their speed of issue is directly related to the highest interest.
- You can not agree to personal compulsory insurance.
Following these simple tips, the client can always choose the best offer. The main thing here is, perhaps, preliminary preparation. Of course, a person will most likely have to spend his time collecting documentation, but it will certainly pay off in full.
Where is it more profitable to get a loan? It is worth recommending currently popular programs from banks such as Vostochny, Raiffeisenbank, Svyaz-Bank and Rosselkhozbank. Let's consider them in more detail.
East Express Bank
It is suitable for those who wish to receive a large sum of money on the security of their property, which is owned. The maximum figure can be up to thirty million, the percentage usually starts from 9.99%. The contract is executed for a period of up to twenty years. They require proof of income, without writing off commissions.
Raiffeisenbank
In this financial institution, the rate is from 9.99% (without personal insurance), the most advantageous offer is a product called "Personal". Its main conditions are: the amount from ninety thousand to two million rubles for twelve to sixty months. Without commission and security, only proof of profit is required, and the application is considered two days.
Svyaz-Bank
It is famous for the Cash program. Interest here ranges from ten to seventeen a year, approving amounts from thirty thousand to three million rubles for a period of up to sixty months. There is no commission, no collateral with guarantors is required, they only ask for a statement of income.
Russian Agricultural Bank - credit conditions
In this institution, rates start at ten percent for a certain category of citizens assigned to reliable customers, and, in addition, for state employees. Such borrowers can count on one million rubles with a maximum credit period of not more than five years, subject to the availability of a guarantee. Without security, you can receive no more than seven hundred and fifty thousand. The maximum percentage is 15.5%.
Binbank
It is possible to get a loan under it under the name "Consumer" at a rate of ten to seventeen percent per year. A loan amount from fifty thousand to two million is provided to customers without commissions and collateral. The application is considered up to three days. It is required to confirm solvency. Without insurance, there is a premium to the rate of four to seven percent.
After a person determines the right amount, you need to study what banking organizations are in the city. It is also important to find out what conditions they offer. The lower the interest rate in a financial institution, the better and more profitable for a client, of course.