Traditional Culture Encyclopedia - Traditional culture - The difference between capital lending and traditional lending

The difference between capital lending and traditional lending

Capital lending, also known as capital lending, refers to loans that can increase the borrower's capital, which can be divided into loans that rely solely on the borrower's credit without paying collateral and loans obtained with non-transferable collateral, mainly including credit loans and fixed capital loans.

Traditional loans When lending to borrowers, banks and other creditors charge the usual interest rate according to their credit analysis. Borrowers can use some form of collateral to obtain loans. Collateral can be this person's car or house, which in itself is the valuation of his personal assets. If there is no mortgage or unsecured loan, borrowers usually get higher interest rates and have limited borrowing funds. Then add interest and compound interest on the debt owed according to the terms.