What is Credit?

What is Credit?

Credit is an opportunity in which the applicant can obtain a lump sum for expenses and then repay the credit according to the contractual schedule. Credit applications are frequently requested from financial institutions or banks. According to the regulations that apply to the applicant

How many type of Credit?

We usually know about personal loans, car loans, and home loans are the most common types of loans. However, in reality, loans are currently classified as follows:

1. Credits are classified based on the characteristics of loan applicants.
2. Credits are classified by time.
3. Credits are subdivided into guarantees.

1. Credits are classified based on the characteristics of loan applicants.

This is a credit that can be divided based on how it is used. Most of them offer this type of loan, which is in the same category as the following 3 types:

• Personal Loan

A personal loan, also known as a consumer loan, is a loan that allows the person applying for it to spend a certain amount of money on consumption. Credit cards and cash cards are examples of personal loans that financial institutions and banks consider to be part of a personal loan. It is also classified as a consumer loan.

• Business Loan

Business loans, also known as investment loans, are loans used for business operations such as investment, production, or use as working capital for various operations. These loans may take some time to process. It also has a somewhat more difficult application and approval process.

• Government Loan

Credits from the government or national debt In the case of a government or agency, applying for this type of loan is used. Borrowing money is required, which can take the form of deficit bonds, savings bonds, government corporate bonds, or other types of government bonds.

2. Credits are classified by time.

Defined by 3 types

• Short-term Loans Credits with a maturity of no more than 1 year contract, such as credit card loans.
• Medium-term loan Credits with maturities between 1 year and 5 years contract, such as car loans and motorcycle loans.
• Long-term Loan. This type of credit has a longer time to apply for a loan than a short-term credit and a medium-term credit because it has a repayment period of several years. In addition to the long loan period, it is also a request for a loan of a higher amount than usual.

3. Credits are subdivided into guarantees.

Defined by 2 types

• Unsecured loans

This is a loan that can apply for a limited amount of credit. This is another type of credit, the approval of which does not take long. Relying on the ability to repay the loan and relying on the creditworthiness of the borrower or loan applicant.

• Collateral loans

For this type of loan, the borrower must have a lender guarantee to cover future damages, such as breach of contract. What is frequently used as collateral, including bonds. Account deposits, title deeds, gold, car registration, and other services are available.

Documents used to apply for a Credit

1. Identity documents

• Copy of ID card or copy of ID card of civil servant / state enterprise
• Copy of house registration
• Copy of marriage certificate, divorce certificate or death certificate
• Copy of proof of change of name and surname (if any)
• In the case of a legal entity, a copy of the business registration can be used. Certificate of registration of a legal entity

2. Documents related to income

• Regular income salary
  • Slip or proof of receipt/payment of wages 
  • The employer bank passbook
• Freelancer
  • In the case of an employment contract, a copy of the employment contract and proof of salary payment can be used.
  • In the case of doctors, lawyers, auditors, engineers, architects, professional cards must also be presented. 
  • Deposit account with account statement or statement (statement) from his deposit account for the last 6 months.
  • Proof of income or other assets such as share certificates, government bond bank accounts.
• legal entity
  • A copy of the last financial statement for the year and not less than 3 years back.
  • A copy of the annual tax return 
  • A copy of the proposed title document as a guarantee
  • Map with the location of the establishment

3. Others Documents

• A copy of the purchase and sale agreement as a deposit.
• Copy of land title or copy of title deed.
• Loan agreement and pledge agreement from previous financial institution
• In the case of co-borrowers, proof of identity and proof of co-borrower's income is required.
• When applying for a business loan, a business plan is needed, such as a business plan for small and medium enterprises, a project plan that needs to be implemented.

Different types of documents are required when applying for a loan. As a result, we must study or re-ask the borrower's details for accuracy. Other forms could exist. An attachment to the loan application that must be considered prior to filling out and signing the contract in the mentioned document, such as

• Consent to the publication of personal data in conjunction with a request to credit institutions to check credit history and subsequent analysis of the relevant credit limit.
• A form requesting permission from a creditor to contact other products in order to recommend or provide information to others that we have the right to choose whether or not to underwrite.
• Other types of application forms include a personal loan application with a cash card and an SMS notification service.

Source : MoneyGuru , ศูนย์คุ้มครองผู้ใช้บริการทางการเงิน ธนาคารแห่งประเทศไทย