Probably, every person had to deal with the problem of lack of funds for some needs. And every time in such a case, we hasten to turn to banks or lenders for help.

Unfortunately, not everyone manages to solve their problems in this way, because not everyone is financially literate and often gets confused in terms. In order to carry out any financial transaction, you need to study in detail the problem itself and what options for solving it are most suitable for you.

Consider the differences between loans and credits, and which method in which situation will be most beneficial for us.

If you need additional material resources, and the only way to get them is to turn to the second party, you should carefully study two concepts.

How is a loan different from a loan? Comparison of concepts

Loan is an agreement between two parties, which is concluded in writing or orally and involves the transfer of material or monetary values ​​from one party (lender) to the other party (borrower) for a certain period of time.

Upon the expiration of the agreed period, the borrower returns to the lender the material or monetary resources in the same volume, form and condition in which they were received. In case of damage to valuables, the borrower is obliged to replace or reimburse the cost of the loan.

Reward for use borrowed money set at the discretion of the lender.

Compulsory written registration of the loan is provided if the amount of the loan is 10 times the minimum wage in the territory of the Russian Federation.

A loan agreement can be concluded by both individuals and legal entities.

an agreement between two parties to provide Money for a certain period of time for a certain monetary reward (commission).

loan agreement in without fail is drawn up in writing and provides for the legal status of one of the parties. In this case, only money can be the subject of the contract, and the commission for their use is prescribed as a separate clause.

Differences between a loan and a loan

Now that these two concepts have become more accessible, we can highlight their main differences and determine the benefits of each:

1. The loan agreement can be concluded orally, while the loan agreement is necessarily concluded on paper and sealed with the signatures of the partners.
2. Make any financial transactions on paper and affix with signatures and seals.
3. In the event of unforeseen situations the contract will become your assistant in court in defending your rights.
4. The subject of the loan can be not only money, but also material assets.. In the case of a loan, only cash is issued.
5. For items with clearly defined individual features such services as rent or loan are provided.
6. When concluding a commodity loan, you should pay attention to such a moment– the subject of a loan can be objects defined by a generic characteristic.Objects that can be weighed, measured, but cannot be distinguished from similar ones.

Perhaps the most important difference between these two agreements is the benefit from the operation.

A loan is always a receipt of commission by the lender:

1. The percentage of the loan is determined by the lender and spells it out in the contract.
2. Under the loan agreement, you undertake to pay a certain amount of money every month, taking into account commissions. You repay the body of the loan and pay a fee to the lender.
3. A cash loan does not always mean the payment of commissions, in most cases it is interest-free. But you will have to return it in full after a certain time.
4. When concluding a loan agreement, the lender must have the status of a legal entity. Therefore, when you are offered to draw up a loan agreement, carefully study the documents and conditions under which the loan is granted.
5. When you take out a loan, the status of the lender does not matter. It can be both a legal entity and an individual.

What is the difference between a loan and a loan

1. Suppose you are going to buy a car.

It remains to save up to the required amount for about another six months, and I want to drive a car right now.

Then you turn to your closest relatives - parents, and they add the amount you need for the purchase. By agreement, you undertake to return this amount after 6 months.

This is a classic example of a cash loan secured by an oral agreement and with an interest-free return of funds.

2. Here is another example of a commodity loan.

You are going to a picnic. The kebab is marinated, the skewers are sharpened, but you forgot about firewood. But you know that your neighbor always has a bundle of firewood "just in case."

You ask your neighbor to lend you firewood and promise to return the same. The next day, after the picnic, you return a bundle of firewood to your neighbor with words of gratitude.

In this example, all the conditions of the subject loan are met. When you took an item without certain characteristics and returned a similar one with the same properties. All these are simple and in some ways even pleasant moments. In the case of a loan agreement, things get a little more complicated.

3. Let's imagine that you decided to start your own business, and you needed a large amount of money to start.

Neither your friends nor your relatives can help you, and you decide to take extreme measures. Go to the bank and ask for a loan. The bank considers your candidacy and you get the green light.

When you receive a loan, you become a hostage to the lender. The agreement requires you to repay the loan monthly in equal installments.

You pay not only the amount that you received from the bank, but also interest - a commission for the granted loan. For late payment, the bank will fine you with additional interest.

In addition to these expenses, the bank can check the intended use of funds.

In some agreements, the bank prescribes this as a separate clause that the recipient does not have the right to spend the amount received for other purposes. If this clause of the contract is violated, the bank may sue you and demand a refund.

In the case of working with a bank, everything should be clearly spelled out for you. Almost always, the bank is legally protected in front of the client, so before you take out a loan, you should correctly calculate your strength.

Output

From the above, we can conclude: if you decide on a loan or credit, seek the advice of specialists. Study the conditions under which you will be provided with these services, carefully read the contract and realistically assess your chances.

The financial term "loan" in the minds of most people is strongly associated with interest-free loans, which were very popular at the end of the 20th century. For example, you can cite mutual aid funds, loans for the purchase of summer cottages, and so on. Currently, interest-free loans are issued to military personnel for the purchase of housing on a long-term installment plan, employers lend money to their employees for various purposes free of charge, entrepreneurs receive government subsidies for small business development, and so on. In reality, the concept of a loan is much broader, but at the same time, this word has a very “narrow” meaning. What is such a paradox? We will deal with this in our article, where we in simple words We will explain what a loan is and how it differs from a loan and a loan.

Loan. What it is?

The concept of a loan in the "narrow" sense is enshrined in the civil legislation of the Russian Federation - Chapter 36 of the Civil Code of the Russian Federation "Gratuitous Use" is devoted to it. And its first article (Article 689 of the Civil Code of the Russian Federation) defines a loan agreement as a contract for free use, according to which one party undertakes to transfer the THING for free temporary use to the other party, and the latter undertakes to return the SAME thing in the condition in which it received it , subject to normal wear and tear or in the condition stipulated by the contract. The giver is here called the lender, and the receiver of the thing is called the borrower.

Please note that the thing is transferred free of charge, and the borrower receives the right to use this thing (and not to store) and the obligation to return it in proper condition. These are the essential features of a loan agreement.

Under a loan agreement, natural objects can be transferred for free use (for example, land), equipment, vehicles, buildings, structures - things that do not lose their natural (consumer) properties during their use. They are also called non-consumable things, i.e. their depreciation (wear and tear) occurs gradually over a long period of time.

Accordingly, the relationship between the lender and the borrower is regulated by Chapter 36 of the Civil Code of the Russian Federation, and we will not go into them in detail, paying only attention to the fact that money in itself, in the narrow sense of a loan, are not things that can be transferred under a loan agreement.

It will be interesting for us to consider this term in a broader sense, in which it is often mentioned. In this regard, it is customary to understand a loan as any thing, including money that one party transfers for temporary use to another free of charge. An important condition of the loan agreement is its free of charge. But when a reward is provided for the use of a thing or money, then such an agreement is already considered a lease, hire, loan, or credit agreement.

Often people confuse the concept of a loan, a loan and a loan (the last two terms are also different concepts!), And you can even come across expressions: “interest rate on a loan in such and such a bank”, etc. That is, any loan is called a loan, which not quite right. So you can call an interest-free loan or loan, but certainly not any. There is a substitution of concepts, but this does not make it hot or cold for a wide range of people - the main thing is that it is clear what is meant. We will turn a blind eye to these nuances and talk about a loan as a transfer by one person of something to another person for a fee or without it, but with a mandatory condition for the return of the thing transferred under a contract or an oral agreement - in the widest possible sense of this word.

There are the following types of loans:

• property loan;
• Bank loan;
• consumer credit.

Let's consider each of them in more detail.

property loan

The property loan agreement implies the transfer for temporary use of:

• land plots;
• real estate;
• enterprises;
• transport, etc.

At the same time, it is important to understand that only the right to use the property, but not possession and disposal, passes to the borrower. And some things (natural objects or land) can be transferred under a loan agreement with restrictions established by law.

The lender must transfer the thing in such a condition in which the other party can use it without hindrance, that is, without defects of varying complexity. In addition, along with the loaned thing must be transferred Required documents(instructions, technical data sheet, etc.), as well as the entire set of devices, without which the use of the thing will become inferior or, in general, impossible. If these conditions are not met, the borrower has the right to demand termination of the contract.

When concluding this type of transaction, the receiving party undertakes to use the subject of the loan in full accordance with its purpose, ensure its safety and not transfer it to third parties. After the expiration of the period established by the agreement, the borrower will have to return (important!) THE SAME thing. Not an analogue, but exactly what they took. Moreover, the wear of the returned items should not go beyond the natural.

The term of the loan agreement may not have strict time limits.

Bank loan

This type of loan concerns only cash. Under the concept of a bank loan, two inextricably linked processes are combined:

1. lending money on certain conditions and for a strictly specified period;
2. a complex of various measures and procedures that together make up the procedure for interaction between a banking institution and customers regarding the provision of funds on credit (in other words, satisfaction of the financial need declared by the borrower).

All bank loans are classified into:

1. active - when the bank itself lends money and is a creditor;
2. passive - in cases where the bank itself borrows money for current needs and is a borrower (interbank lending).

In addition, bank loans are divided into many types according to various criteria:

• method and term of redemption;
• purpose of its use;
• the form of the loan;
• method of accrual and collection of interest on the loan;
• the size of the interest rate;
• the method of granting the loan;
• availability of collateral;
• categories of borrowers.

Bank loans, in addition to issuing cash loans, include the activity of accounting bills and other forms of activity. This topic is so broad that it requires the dedication of a separate, and not even one, article to it, and here we only walked through it in passing, but we don’t need more for a general concept.

consumer credit

This is an exclusively cash loan that is issued to citizens and can be used to pay for necessary purchases. These loans take the form of:

• bank loans for urgent needs;
• credit card;
• purchase of goods in installments;
• mortgages;
• car loans, etc.

The time has come to draw a line under our reasoning. So, in a nutshell, a loan is a type of loan. Every loan is a loan (in the broad sense of the word), but not every loan is a loan. P.S. This expression does not apply to loans. Here is such a paradox.

Who often deals with banks and MFIs, has repeatedly encountered confusion - how to distinguish a loan from a loan? Some argue that there is no difference, and these words are literally synonymous with each other.

Others contradict: in no case do not confuse these concepts, otherwise you will “get on the money”. Whom to believe?

The material will explain in detail the difference between a loan and a loan and all the legal subtleties associated with these financial products.

Can it be confused?

“What is the difference between a loan and a loan, if I have to return these funds anyway?” - so will say any consumer who is not particularly versed in the banking system.

Indeed, one can often hear the word “loan” from bank employees in the meaning of a loan, but there is still a formal difference between them.

Loan is finance or material values that are the subject of the loan agreement. They are united by specific "related" features.

Also, this word may mean a monetary transaction concluded upon receipt of funds on loan, subject to certain requirements.

Credit is the transfer of funds owned by the organization fixed in writing (an agreement between the lender and the applicant). The body can be not only money, but also an expensive product.

A loan implies a return of funds within a certain period and in accordance with the interest rate. In case of violation of one of the clauses of the contract, either party may sue.

What are the similarities between a loan and a loan? Both products are issued to individuals and legal entities in the form of a fixed amount and are returned in a larger amount (at the expense of interest).

How to learn to distinguish?

It is difficult for a person who does not have an education in economics and finance to thoroughly understand the difference between a loan and lending, even with a thorough study of the terminology. Let's take a look at the simplified explanations.

The difference between a loan and a loan (table)

Distinctive feature	Example
Authority of the organization	Credits have the right to issue a banking organization that has permission to conduct credit activities. Loans can be operated by both a legal entity and an individual who puts forward individual requirements for the return of borrowed funds.
Contract type	The agreement, drawn up upon receipt of a loan, comes into force after the money has been transferred to the client. The loan agreement has a slightly different structure - consensual. In other words, the document only implies that both parties mutually agreed to comply with the conditions specified in the contract.
Having an interest rate	Microfinance institutions sometimes issue funds without interest. This is commonly referred to as "payday cash". Lending is not interest-free and is issued for a long period.
The legislative framework	Conditions and their fulfillment when obtaining a loan are regulated only federal laws. When applying for a loan legislative framework not only federal acts are considered, but also normative (drawn up Central Bank).
Conclusion form	A person who draws up a loan enters into a contract with a financial institution in writing. When obtaining a loan, you can get by with an oral agreement and agreement on the terms of return.
Subject of the contract	Lending in any case implies a return of funds, regardless of the form in which they were lent: in cash or through the purchase of goods / real estate. As a loan, both money and any object can act.

The financial sector of the Russian Federation is developing annually, and therefore the service of providing loans is increasingly in demand. People buy credit cards consumer loans take out a mortgage, etc.

Mortgage is also considered the most demanded banking product.

Many Russians also use the services of MFIs. The conditions put forward by microfinance organizations are more favorable and "transparent".

People regularly borrow money up to their paycheck, and, as a rule, these amounts do not exceed 20,000 rubles.

With whom is it safer to cooperate: with a bank or an MFI?!

There is no single answer to this question. But there are points that need to be taken into account when making such decisions. A bank operates on the basis of a license, and a microfinance organization on the basis of registration.

Because of this, most people tend to trust banks more than MFIs, so that in case of any financial “misunderstandings”, they can sue and defend their rights.

Microfinance companies have appeared in the countries of the former CIS recently. In this regard, eight years ago, Law No. 151 was adopted, regulating the activities of MFIs. The law states that no microfinance organization has the right to operate within Russia if it is not on the list of objects of the state register.

The activities of the Ministry of Finance are inspected by the Central Bank of Russia: data are collected about the company, which are then entered into the state register. Along with this, financial statements are checked to confirm that the organization does not carry out illegal operations.

Therefore, you should not worry about cooperation with MFIs. Checking the legality of a microfinance organization is very simple: before you borrow money, check if this company is listed on the website of the Central Bank of the Russian Federation.

It will also not be superfluous to carefully study the website of the company you are contacting, namely: reviews of real customers, terms of cooperation, the maximum amount for issuance.

Don't forget about phishing. This is a fraudulent operation, thanks to which the attacker obtains the personal data of banking customers by “connecting” to the websites of large and reliable banking organizations.

Remember that an MFI leading a legal financial activity, will never ask for passwords, code words regarding payment details. Also, when applying for a loan online, this organization will not redirect the client to third-party resources under the pretext of protecting data.

Where is it better to take money - in a bank or an MFI? It depends on the purpose for which the money is needed. Microfinance institutions issue funds for a short period (several weeks or months).

It is worth it if you plan to buy something worth up to 5-10 thousand rubles, go to the sea or skimp on paychecks. It is advisable to deal with a bank only if it is a question of large sums(from 50,000 rubles), the return of which can be “split” over several years.

Conclusion

"Crediting" and "loan" are two concepts that are often used in the same sense, but fundamentally different in meaning.

Only a financial institution that has a permit for this kind of activity can issue loans. MFIs operate on the basis of registration in the database of the Central Bank of Russia.

In any case, no matter what type of borrowing you choose, you need to carefully read the terms of the contract and clarify with the employee of the organization the points, the meaning of which can be perceived ambiguously. First of all, this concerns the repayment period and the features of interest rates (if any).

Today, there are a huge number of various options for obtaining money in debt. At the same time, you can draw up both a private transaction with a relative or acquaintance by writing a receipt, and receive money from a banking institution. In addition, there are loans, short-term and loans. The difference between these or those concepts is not known to everyone. Therefore, it is worth considering some of the nuances in more detail.

basic information

If we talk about the main differences between loans and credits, then in the first case, the person who provides the funds is called the lender, and the citizen who receives them is called the borrower. In the second case, the creditor (bank or other financial institution) provides money, and the borrower receives it. It is also worth paying attention to the fact that, as a rule, loans can be offered to the population by a variety of organizations. This is the main difference between a loan and a loan. However, this is not all.

The loan is issued exclusively by a banking institution. That is why there is an opinion that the terms of loans are more loyal. However, you need to understand that, unlike a banking institution, an organization that provides a loan does not always have a license to conduct such activities. In this case, at the most unexpected moment, the borrower may have serious problems.

In addition, it should be borne in mind that when drawing up a loan agreement, as a rule, additional details are clarified that do not work in favor of the borrower. It is very difficult to prove the unfairness of such a transaction in this case. If we are talking about a bank loan, then a formal agreement is signed, in which all the points very clearly describe the transaction procedure. In addition, there are other main differences between a loan and a loan.

Interest

First of all, in favor of loans, it is worth saying that they are interest-free. However, in this case, the client must study the signed agreement in great detail and make sure that the debt without interest is indeed such. Quite often, during the paperwork, other conditions pop up, according to which the client must pay additional amounts of money.

If we are talking about an official financial institution, then in this case we usually talk about a fixed interest rate, which is set by the Central Bank of Russia. Among other things, speaking about the differences between loans and loans, it is worth saying that the loan agreement always describes in detail all monthly charges and interest overpayments for using bank funds. It also calculates the possibility of partial or full repayment of the loan. Additional services and their cost are also indicated.

The difference between a loan agreement and a loan agreement

If we are talking about a credit transaction, then in this case a written contract is drawn up without fail. It must contain all the conditions, starting from 1 installment and ending with the last deposit of funds.

If you take out a loan up to 10 minimum payments employment, a written contract is not required. However, do not rejoice ahead of time. If the borrower does not have a written contract, then in case of any problems or contentious issues he can't prove himself right. In this case, the terms of the transaction are concluded exclusively orally.

Speaking about the difference between a loan and a loan, it is worth paying attention to the fact that when receiving money from a bank, all relations between the borrower and the lender will be regulated not only Civil Code but also the Central Bank. If we are talking about loans, then in this case it is possible to influence the financial structure only by contacting the Civil Code. Based on this, it should be borne in mind that banks have more rights when collecting debts when going to court.

It is also worth paying attention to the fact that a loan can only be granted legal entity. This must be reflected in the contract. A loan can also be provided by a private person. However, such transactions are not always safe.

What do loans and credits have in common?

Both in the first and in the second case, funds are provided to borrowers on a reimbursable basis. This means that after a specified period of time, a person must return the money borrowed (usually with interest). Both the loan and the loan can be targeted. In this case, we are talking about money that will be issued to a person for spending on specific purposes (for example, to repair an apartment or to expand their private production). At the same time, special-purpose loans and loans cannot be used for other purchases.

In this case, the organization or person that lends money has the legal right to control exactly how the previously issued funds were used. If the borrower spends them on other needs, then in this case we are talking about non-compliance with the terms of the contract. However, among other things, in practice there is also such a thing as a loan. Many believe that it means the same thing as a loan. Actually it is not. Although the difference between a loan and a loan is not so significant, it is worth learning more about this. Especially if you plan to borrow a large amount of money.

How is a loan different from a loan?

In order to correctly draw up, you need to learn more about the basic concepts in banking practice. If we talk about a loan, then by and large it is a broader concept. In simple terms, a loan can be considered one of the varieties of a loan. That is why many people confuse these meanings.

When registering, a person can be provided with both property and money on a reimbursable or non-reimbursable basis. Money can be provided by both legal entities and individuals. When drawing up a contract, its term and interest rates may differ depending on the specific conditions.

If we talk about loans, then in this case we are talking exclusively about the provision of funds in cash or non-cash form. It can be issued exclusively by a financial and credit institution with an appropriate license from the Central Bank.

Speaking about the difference between a loan and a loan, it is also worth considering other types of transactions. Especially those that are relevant today.

microloans

Today's popular MFIs skillfully combine the features of all types of transactions. Microloans can be provided by both legal entities and individuals. They are issued only in cash, and their amount rarely exceeds 30 thousand rubles. To apply for such loans, it is enough to present a passport. Unlike loans, in this case, funds can be obtained only for a short period of time.

Finally

Before applying for a loan or any other financial transaction, you should think several times. In any case, the money will have to be returned and most often with an overpayment. Therefore, sometimes it is more profitable to save.

Loans and credits in the minds of ordinary people are one and the same. Both concepts imply the use of other people's money or other property for a certain time, with or without interest.

But in fact, these products have significant differences that are very important to know before signing a contract.

concept

Before considering how a loan differs from a loan, you need to understand what it is. A loan is a transfer from one person who is a lender to another - the borrower of money or things that are united by generic characteristics for temporary use on a return basis.

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Issuing and receiving loans Russian legislation any legal and natural persons can, if it is not prohibited by law or other documents, for example, the Charter of the organization.

One of the types of loans are loans. They also involve the transfer of funds for temporary use by the borrower, but this is where their similarities end. Only approved companies can provide loans. Usually they are banks.

It is worth knowing that a loan implies the mandatory presence of interest paid for the use of other people's money.

Video: Legal advice

Types of their features

There are many types of loans and credits. Their classification can be carried out according to various criteria, for example, the period of use of funds, the presence of interest, and so on.

It is especially important to correctly determine the type of loan for organizations, because they need to make cash postings in accounting.

Consider the main types of loans popular in Russia:

• customer credit;
• car loans;
• mortgage;
• commercial.

Consumer loans are most in demand among the population of the Russian Federation, which can be provided for the purchase of equipment, repairs or urgent needs of the borrower. The peculiarity of such loans is that they are simply issued and have fairly high rates.

Important! One type of consumer lending is credit cards. This method has gained popularity as it often has a revolving debt limit and may have an interest-free or so-called grace period.

More profitable are loans for the purchase of a car or real estate. In this case, the acquired property acts as collateral and the bank has the opportunity to reduce the rate due to good security for the repayment of the debt.

Separately, it is worth highlighting commercial loans that are issued to enterprises and organizations for the development of new areas, the purchase of equipment and the conduct of transactions that require large financial investments.

Loans can be divided into the following types:

• from one individual to another;
• between organizations;
• between a legal entity and an individual.

Any private person can not only receive, but also issue a loan. If the transaction takes place between two individuals, then it has its own characteristics. For example, if the loan amount is up to 10 minimum wages, it is not necessary to conclude a written agreement, and all loans less than 50 minimum wages are considered interest-free, unless otherwise specified in the agreement.

Between themselves, organizations can also issue loans. This serves as a good source for financing large projects for small companies that find it difficult to obtain a bank loan.

If an organization makes a loan to an individual, then it is necessary to take into account the possible tax consequences that may arise if rates are too low. Companies often also raise funds from individuals, especially business owners.

The difference between a loan and a loan in the table

Do not confuse the concept of loan and credit. A loan can only be issued by a banking organization that has the appropriate permission from the central bank. Loans can be provided by all companies and individuals without special restrictions.

Credit is usually in the form of money. In some cases, a loan can be provided not only in money, but also in things that have common features and no individual ones. For example, you can lend lumber or nails, but you can't lend paintings by famous artists or sculptures.

If the loan was provided by things, then its repayment in cash is not allowed. The return is made with the same property that was received. The only thing is that in the presence of interest, they can be expressed in monetary terms.

A loan implies the obligatory payment of remuneration to the bank for the use of its money. The loan is not always reimbursable. Organizations and individuals can provide loans on an interest-free basis. This often happens when money is loaned to relatives or affiliates.

Loans can be repaid ahead of schedule at any time without asking permission from the bank. The loan can be repaid ahead of schedule only if there is an agreement to this effect with the lender. The exception is interest-free loans, which can be repaid earlier without restrictions.

Table. The main differences between loans and loans.

Classification

Loans and credits are classified according to different criteria, depending on what they use to determine the type of loan.

Consider the criteria for classifying loans and credits:

• terms;
• the presence of interest;
• goals;
• security.

One of the most important classifications is to determine the type of loan or loan by term. This is especially necessary for organizations that use a different account in accounting, depending on the term of the contract.

Classification of credits and loans by terms:

• long-term;
• short-term;
• perpetual.

Long-term debts are recognized if the contract provides for a period of use of property or money for more than 1 year. In other cases, loans and credits are usually classified as short-term. Separately, it is worth highlighting perpetual loans. They must be returned upon receipt of a claim from the creditor within 30 days.

Important! Loans cannot be perpetual. The loan agreement must specify the loan period.

Loans may not have interest. In this case, they will be interest-free. This category of agreements is often used by the founders when issuing loans to their organizations, especially at the stage of development. Loans are provided only on a reimbursable basis, although in some cases the rate on them may be minimal.

Targeted loans may be provided. In this case, the borrower can spend the funds received only on solving certain problems, and the lender gets the opportunity to control the spending of funds by the borrower. General purpose credits and loans can be spent on any acquisitions that do not contradict the laws.

The presence of collateral is a very important parameter if non-affiliated parties are involved in the transaction. It is important for the lender to get a money back guarantee, in return he will be able to lower the rate. As security, a guarantee or pledge of movable and real estate borrower.

Accounting and Auditing

Unlike individuals, organizations are required to keep accounting records. Proper paperwork and accounting for payments on loans and borrowings will help to avoid claims from inspection authorities and unpleasant tax consequences.

All loans and credits with a maturity of up to 1 year are recorded on account 66 "Settlements on short-term credits and loans". Long-term loans are recorded on account 67. Interest by the borrower is usually recorded on account 91, since they are other expenses.

In accordance with accounting policy It may be acceptable for an organization to transfer long-term loans to short-term ones and vice versa.

When conducting audit the correctness of registration and accounting of transactions with loans and credits, the intended use of the funds received, the correctness of determining the amount of interest, the completeness and timeliness of debt payments, the presence of overdue debts, etc. are established.

Treaty

Properly drawn up contracts help the parties to avoid conflict situations in the event of disputes in the transaction. It is important to pay special attention to the documents at the stage of preparation. For example, the borrower may include a prepayment clause in the loan agreement.

In each case, it is necessary to develop an agreement individually, but in practice it includes the following conditions:

• loan or credit object, amount, term;
• conditions and procedure for issuing and repaying loans;
• forms of security;
• goals;
• interest and the procedure for their payment;
• other conditions.

When drawing up a loan agreement, special attention is paid to the responsibility of the borrower. Late fees can be very significant. Additionally, the lender may require to pay off the debt ahead of schedule.