What type of loan should I choose?

If you are considering the idea of ​​asking for a money loan, you may have doubts about what type of financial product you are most interested in. And, at present, we have at our disposal different types of credits and each one is specially indicated for a type of need.

Surely you have heard more than once about fast microcredits, personal loans and, what to say, the well-known mortgages, but you are probably not sure what each of these loans really is and in what situations we can do good use of it.

Below we explain what these types of loans are and we show you which one is the most suitable for each situation.

Lending in Russia cannot be divided into just two areas: retail and lending to legal entities.


Retail loans are represented by the following products:

Retail loans are represented by the following products:

  • Consumer Loans. This type of loan is characterized by the issuance of funds to individuals, employees, for consumer purposes (buying household and other equipment, issuing cash, credit cards, etc.).
  • Auto Loans for Individuals. This type of loan involves the issuance of funds to individuals for the purchase of vehicles. Basically, banks have one limitation – the inability to buy special equipment in this way.
  • Mortgage. Acquisition of residential or non-residential property on credit. Characterized by significantly lower prices compared to other products, as well as long loan terms (approx. 10-25 years).


Types of loans in the Russian Federation for legal entities

Types of loans in the Russian Federation for legal entities

In contrast to private customer business, the product range for legal entities is much wider. In general, we can differentiate between the following types of loans to legal entities:

  • Real estate purchase credit, this type of credit enables legal entities to purchase non-residential and residential property. The difference to a mortgage for natural persons is the significantly shorter loan terms (5-10 years).
  • Loans for the purchase of vehicles. Legal entities as well as entrepreneurs have the opportunity to buy both cars and trucks, special vehicles.
  • Loans for buying equipment – most popular among organizations. Technologies do not stand still, so the emergence of new solutions in the field of production makes it possible to work more efficiently and efficiently. Not everyone can purchase such equipment for cash. On the proceeds comes the opportunity to buy it on credit. The main condition for lending to buy equipment is the borrower’s own contribution. Sometimes it can be from 20 to 50 percent of the loan amount. The term of such loans is no more than five years.
  • Current asset replenishment loan. This is a short term type of loan. The purpose of this product is to replenish current assets (purchase of goods, raw materials, consumables, etc.).
  • Overdraft – short-term loan.A type of loan without collateral for legal entities and entrepreneurs. The term of such a loan is one month. A mandatory requirement is zeroing the overdraft every month and revising the limit. Banks generally set a limit depending on the volume of sales in the current account. In other words, an overdraft is one way to go negative on a checking account for a certain amount.
  • Factoring as a type of loan has been offered to bankers more recently. The role of factoring is to provide cash to the company if the company has sent the goods and there is still no payment for them. The enterprise seller based on the contracts concluded with the buyer applies to the bank with a request for factoring. The bank checks the situation and suggests that the seller assigns the goods to the bank. The bank pays the seller a value of the goods sold, and the buyer in turn is charged not with the seller but with the bank. After final settlement with the buyer, the bank returns the remaining amount of the money received for the goods to the seller. The seller pays a commission to the bank for this type of loan.

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