The origin of the word “credit” is based on the Latin word “credere” meaning “trust”. In our language, it can be broadly defined as the exchange of an existing wealth for a wealth that will be available in the future or the promise to pay the price of a good in the future. In other words, it is the renunciation of the use of ready purchasing power in favour of a person. A loan agreement is an agreement between the lender and the borrower that includes the granting and payment of the loan within certain limits and the conditions in this process.
What is the Legal Nature of Loan Agreements?
The legal nature of a contract is important for the correct determination of the provisions to be applied to it. The legal nature of loan agreements has been discussed in the doctrine and various opinions have been put forward. These views are as follows:
- Pre-loan view,
- Consensual loan negotiation,
- A multi-stage idiosyncratic view of the contract,
- The one-stage contract view.
The generally accepted view is the last one. This view explains credit agreements as a contract that imposes obligations on both parties, has a definitive nature, and attributes obligations to the acts of giving and doing.
What are the Types of Loan Agreements?
Loan agreements are basically divided into cash and non-cash loans. Cash loans are loans given by banks to real or legal persons to be repaid at the end of the maturity date with interest. Cash loans are as follows:
- Fixed-term money lending,
- Promissory note or commodity advance loan,
- Granting loans through discounting of negotiable instruments,
- Receivable purchase transactions,
- Provision of loans for financial leasing transactions.
Non-cash loans consist of the following items:
- Guarantees,
- Bail,
- Admission,
- Aval,
- Turnover credits.