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    Classification of Credit

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    mhyll
    CREDIT AND COLLECTION

    Copyright:

    © All Rights Reserved
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    Classification of Credit

    Uploaded by

    mhyll
    5 views7 pages
    CREDIT AND COLLECTION

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

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    CREDIT AND COLLECTION

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    5 views7 pages

    Classification of Credit

    Uploaded by

    mhyll
    CREDIT AND COLLECTION

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    Classification of credit

    Classification on the basis of


    time
    ◦ A. Short-term Loans
    ◦ B. Medium-term Loans
    ◦ C. Long-term Loans
    Classification according to
    Purpose of the Loan
    Credit could be classified based
    on the purpose of the loan such
    as crop loan,
    poultry/dairy/piggery loan,
    machinery and equipment loan,
    forestry loan, fishery loans etc.
    Classification according to
    Security offered
     Securitiesare usually advanced against
    tangible assets like land, livestock or any
    capital asset, as either medium or long
    term loans.

    ◦ A. Mortgage loans
    ◦ B. Hypothecated loans
    Classification according to
    the Lenders
     Non-Institutional

    - are those which do not have any uniformity


    in their lending procedure, their interest rate or their
    collateral requirement.

    * Institutional Sources
    - those recognized institutions which follow
    standardized procedures of lending. They lend at
    regulated interest but normally require some
    collateral. The loans from this source are always large
    compared with those obtained from non-institutional
    sources.
    Classification according to
    Borrowers
    Credit instruments
    ◦ a. Promissory Note
    ◦ b. Mortgages

    There are several types of mortgages

    * Real Estate Mortgage


    * Chattel Mortgage
    Purchase on Contract
     This involves the transfer of the property to
    the buyer or the purchaser while with the
    title of the property remains with the seller
    until the last installment is paid.

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