The functioning of the financial system in the world is impossible without such an important mechanism as lending. A loan is an economic relationship that arises between the subjects of a financial transaction, consisting in the provision of a loaned (borrowed) value to achieve certain goals, subject to its repayment, payment and urgency.
Credit system
The purpose of the credit system is to mobilize free funds to provide them for fixed-term use for a fee. The basis of the system is a commercial banking structure. Its main activity lies in the plane of granting loans and registration of deposits and deposits. In addition to commercial banks, important participants in the credit system are: the Central Bank, specialized credit and financial institutions. Most countries have three- or four-tier credit systems: at the first level - the Central Bank, at the second - various forms of banks (savings, investment, mortgage, commercial). At the third level - non-bank credit and financial organizations. The fourth level stands out, which includes insurance and pension funds, credit unions and others. System operationprovided by the interaction between the participants of credit relations.
Subjects of credit relations
The subjects of these relations are the lender and the borrower. The relationship between them is determined by the need for the money supply from the borrower and its availability, and most importantly, the possibility of issuing from the lender. Thus, the lender is the party that provides the loan (loan/loan). The borrower is a party that receives a loan (loan / loan) and assumes the obligation to repay the borrowed funds on time.
One and the same person in the framework of financial and credit relations can simultaneously act both as a creditor and as a borrower. Its definition in this case is such that, for example, an individual, applying for a loan at a bank, acts as a borrower, the bank in this case - as a creditor. At the same time, the presence of a deposit in a bank changes the places of the participants in the relationship. And already a private person is a lender, and a bank is a borrower.
Object of credit relations
The main component of the relationship between the borrower and the lender is the transfer object. The object of the transfer of credit relations is the loaned, or so-called unrealized, value. In other words, the creditor has free funds that have settled with him and stopped in their movement. Thanks to the loan, it becomes possible to start a new cycle to continue the turnover and send funds into circulation. To do this, it is enough to issue a loan to the borrower for certainconditions. From this point of view, the borrower is a person who, by receiving and circulating the advance amount, allows the circulation of finances to be uninterrupted. And this ultimately speeds up the reproductive process. It is the advance nature of the loan that is an important feature of credit and financial relations.
Another important condition for the functioning of the credit mechanism is the repayment and preservation of the creditor's ownership of the funds provided for use by the borrower. One of the guarantees of repayment is the creditworthiness of the borrower.
The fundamental principle of credit is to preserve its value
When lending your funds to a creditor, it is important to at least save them and increase them as much as possible. The fulfillment of these conditions is a fundamental quality of lending.
In reality, it is not always possible to realize it completely. The main danger that lies in wait for participants in credit and financial relations is inflationary processes. The result of the overflow of money circulation channels is an excess of money supply and, as a result, a decrease in its purchasing power. The borrower is the person who assumes the obligation to repay the loan. But in a situation of inflation, the returned funds, while maintaining the nominal amount, actually have an already discounted form. However, there are many other risks, upon the occurrence of which the borrower is not able to repay it in accordance with the terms of the loan. And not always the fault lies only withdebtor. Often it is the violation of his legal rights that leads to such sad results.
Protection of legal interests of borrowers
Initially, in a credit relationship, the borrower is the weaker party from a legal point of view. Financial institutions minimize the influence of the client on the content of the loan agreement, thereby limiting his ability to influence the terms of the provision and repayment of the loan. This makes it necessary to sign agreements that are most beneficial to the lender, but at the same time infringe on the rights of the borrower. The most common violations of the rights of the person who took the loan:
- calculation of the interest rate for using a loan on the entire body of the loan (and not on the balance of the debt);
- calculation of commission for issuing a loan;
- charge of a pen alty that does not correspond to the amount of the principal debt;
- cognizance of the dispute over the territoriality of the creditor bank;
- insurance of borrowers as a prerequisite for obtaining a loan;
- inclusion in the loan agreement of a condition on the calculation of a commission for maintaining a loan account and issuing a loan.
FZ RF “On consumer credit (loan)”
On July 1, 2014, Law No. 353-FZ came into force in the Russian Federation. Its purpose is to regulate relations that arise in the process of providing a consumer loan (loan) to an individual, if the loan is not issued for business purposes.
The main goal of the Law is to bring order to the consumerlending and borrower protection. Unfortunately, until recently, even stable banks with a high reputation allowed themselves to take advantage of the legal illiteracy of their clients. Focused on ensuring the legal protection of borrowers, the law clearly regulates the following points:
- standardization of the loan agreement form;
- restrictive nature of the amount of pen alties accrued in case of delay in payment of the loan;
- limiting the retail lending rate;
- clarification of the effective interest rate calculation mechanism;
- strengthening control over the work of microfinance institutions;
- regulating the work of collection services.
Millions of people live in debt
According to statistics, from 60 to 90% of working citizens of the country have outstanding loans. At the same time, the popularity of loans is steadily growing. Citizens in a frenzy conclude loan agreements. And banks, minimally checking the creditworthiness of the borrower, are ready to provide loans. Sometimes it is enough to present one passport. It is in this ease and accessibility that a “time bomb” is laid that can hit both the lender and the borrower. If the recipient of the loan is not able to repay the loan, then this is already a problem not only for him, but also for the lender who issued the loan. It is important to soberly assess the risks and the level of responsibility and apply for a loan only with 100% confidence in its repayment.
