Although talking about loans and mortgage loans we usually consider them synonymous, but in reality they are two totally different products. So, in terms of legal effects, it is fundamental to distinguish between both figures, since this will lead to important legal consequences that the consumer must know .
It is a financial operation in which an entity or physical person delivers to another a certain fixed amount of money at the beginning of said operation, with the condition that the borrower returns that amount together with the agreed interest in a determined term. The repayment (which we commonly call amortization) of the loan is normally made through regular monthly, quarterly or semi-annual installments, throughout said term. The operation has a predefined life. The interest that accrues is charged on the total of the borrowed money.
It is the amount of money, with a fixed limit, that a financial institution puts at the disposal of a client. This is not given the total amount at the beginning of the operation, but can be used according to their needs at any time. Through an account or a credit card, the entity will make partial deliveries at the request of the client. So it may be that the client has all the money or only part or definitely nothing. In this case, he only pays interest on the money he has arranged. At the time of returning the money, you may have more, but without exceeding the limit.
These are also granted by deadlines but the difference is that when it is finished it can be extended or renewed. Their interests tend to be much higher than those of the loans.
Mortgage loans are acquired to finance the acquisition of goods or services in specific areas such as:
Credits are acquired to cover certain lags such as payments and collections or to face periods of lack of money, which is why they are more recommended for companies than for individuals. Although they are used to buy products of lesser value such as:
It is important to be clear about what we need and for what we are going to occupy it, so that afterwards we will not be giving ourselves limits on the wall.
When making decisions we often do it without analyzing what we really need, we can only reflect to carry out a certain operation a loan or a loan.