What is the difference between credit and loan?

The main difference between credit and loans is their substance. The essence of credit refers to banks providing credit to customers in relevant economic activities, directly providing financial support to customers or providing guarantees to third parties. The essence of loan refers to an activity in which banks or other financial institutions lend monetary funds at a certain interest rate and must repay them.

There are other differences between credit and loans

The content is different: Credit refers to the funds provided directly by commercial banks to non-financial institutional customers, or to customers in loans, trade financing, and bill financing. , financial leases, overdrafts and other related economic activities that may arise from compensation and payment obligations. Loan is an activity in which a bank or other financial institution lends monetary funds at a certain interest rate and repays it. Loans in a broad sense refer to the general term for loans, discounts, and overdraft loan funds.

The methods are different: the loan requires fixed repayment of principal and interest, which means that the sum of the loan principal and interest adopts a fixed monthly repayment method. Most banks' housing provident fund loans and commercial personal housing loans adopt this method. This way you only have to pay the same amount every month. Commercial bank credit can be divided into basic credit and special credit. Basic credit refers to the credit limit determined by commercial banks based on national credit policies and the basic conditions of each region and customer.

Different principles: Different credit extensions are implemented based on factors such as economic development, economic and financial management capabilities, credit capital conditions, and financial risks in different regions.

Detailed loan process: 1. Apply for a loan. Customers should learn about the bank's credit products in advance and see if any are suitable for them. After understanding clearly, they can call the bank's customer service for consultation or on-site consultation. Go to the bank to fill out a loan application form, and bring along relevant documents such as ID card, household register, residence permit, work permit, marriage certificate, etc. 2. Pre-loan investigation. The bank is qualified to conduct a preliminary review of the personal information of the loan applicant. If the applicant meets the conditions, he or she will proceed to the next step of the loan process. 3. Loan approval. The approver determines whether the loan will be approved based on the loan applicant's repayment ability, personal credit record, guarantee mortgage, etc. 4. Mortgage registration. If a loan applicant chooses a mortgage loan, he or she needs to go through relevant registration procedures after being approved. 5. Grant loans. Loans can be issued to those who meet the bank loan conditions and have completed all procedures legally.