Cash credit

Cash credit is the amount of money that a lender (usually a bank) gives to a borrower for a specified period of time for a specified consideration. The word “credit” comes from the Latin word “credare” and means to trust, to believe.

In order for a natural or legal person to obtain a cash credit


It is necessary to have a credit guarantee, that is to say, material values ​​or other conditions, which enable the lender to lend money with a guarantee that it will be repaid. The tangible assets used as collateral for the cash credit must be insured.

Individuals must apply for and obtain information on their average monthly income (or other credit security) in order to qualify for the credit. Sometimes the borrower is not able to guarantee the repayment of the loan with certainty, in which case a third party guarantor is involved, who is also co-responsible in the repayment of the cash loan. The solvency of the guarantor is assessed on the same basis as the borrower.

The lender assesses credit risks

The possibility of loss if the borrower fails or refuses to comply with the terms of the contract. Therefore, lenders (banks) carefully evaluate the borrower’s repayment options and develop bank strategies and policies for managing credit risk. Such management shall include the use of prudent criteria for the granting of credit, the regular monitoring, evaluation and administration of cash credits.

Banks offer a very wide range of loans for virtually every need – everyday purchases, university expenses, home improvement and purchase, travel, and other major purchases (such as cars). There is also the option of opening a cash credit line – this type of loan is advantageous in that you only have to pay interest on a portion of the credit limit you spend each month, but the borrower can choose when to repay the amount of money used.

Banks offer students particularly good credit terms


Student loans are quickly processed, have flexible repayment terms (you can take a credit vacation, and repayment is several years after graduation). In addition, payment of the principal amount of the loan may be deferred for the duration of the Master’s, Resident’s or Doctoral studies. Similarly, the repayment term may be extended during pregnancy, post-natal period, or parental leave (if not in full-time employment).

Nowadays, many people use credit cards, a convenient payment method that banks give to loyal customers who are able to repay the cash loans they have taken on time. However, at the moment, banks are warning – “Borrow carefully and consider whether you will be able to repay the loan”!

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