Loans – Glossary

It is a prepayment or advance payment. This term is most commonly encountered in leasing sales. Represents the first installment in advance. The amount of the down payment depends on the pre-set installments and the interest rate. The higher down payment the client takes the less risk for the provider. It is given as a percentage.

It expresses the ability and willingness of the client or firm to meet its financial obligations to the creditor. In other words, it is the credibility of financial entities in the financial market. Creditworthiness is most often assessed for clients applying for a bank or non-bank loan.

Bank loan

Financial assistance provided by a company that has been granted a banking license from the Czech National Bank. Bank loans are further divided into special-purpose and special-purpose loans.

For the first mentioned loan, it is necessary to submit a document confirming that you actually used the borrowed money to finance the given service or product. You can use a dedicated loan for anything.

Cashless loan

For this loan, after signing the contract, the entire amount is transferred to the client’s account. This type of transfer is very fast, it is used by both banking and non-banking entities.

Price of the loan

There are the total costs you pay to the bank or non-banking company. All fees and interest are included.

Due date

The maturity period is chosen by each client before the contract is concluded. It expresses the time period during which you will repay any loan. These installments are most often monthly, but you will also encounter one-off or weekly installments.

Proof of identity

A document that confirms your identity. This may be an identity card without which you cannot do when applying for a loan. Other identity documents are: driving license, birth certificate, passport or arms license.

Debt

The amount you are required to pay under a contract with the creditor (s).

Debtor

A person who has a financial obligation to one or more creditors.

Seizure

One of the extreme options how a creditor can recover the amount owed by the debtor. It is a material recovery which is carried out after the decision of the competent court.

Fixed interest rate

The amount of the interest rate, which is fixed for a given period. Interest rate fixation usually ranges from 1 year to 10 years.

Collection

The payment order, which is made from the client’s account, very often in the form of a permanent payment.

Insolvence

It is the inability of the borrower to meet its financial obligations in the long term and satisfy all creditors.

Consolidation

This service is most often provided by banks and non-banking companies. With consolidation, you can merge multiple financial liabilities into one. As a result, you will only repay one loan and you should also save. The most common consolidated services are: loans, credit cards, leases and / or overdrafts.

Credit card

A type of credit card you can use to pay, for example, in stores, clients use a revolving credit card, which they then repay. Each credit card should have an interest-free period.

Extraordinary installment

Is the amount that is paid to the lender outside the agreed repayment dates. In some cases fees may be charged for this installment.

Non-bank loan

It is a financial service provided by a non-banking company that has been granted a license to operate by the Czech National Bank.

Zero increase

It is most often used for hire purchase. The sum of all repayments must accumulate as much as you would pay for the product immediately, so the client will not overpay anything.

Debt elimination

Bankruptcy resolution designed for individuals who are not in business. Thanks to debt relief, you may be forgiven part of the debt, but you must meet the conditions laid down in the Insolvency Act.