Isabela Colleges, Inc.
Don Jose Africano Street, District 2
Cauayan City, Isabela, Philippines
Financial Management
BSBA Department
Activity 2
Credit and Collection
Submitted to:
Ms. Mary Ann A. Discar
Professor
Submitted by:
Michael John L. Garcia
Student
1. Kinds of Consumer Credit
Installment Credit
Installment credit is a fixed amount of credit made available to you to use once, typically
for a specific purchase, like a home or a vehicle. Repayment periods and monthly payments are
usually fixed for the life of the loan, but your monthly payments could vary if your loan has
a variable rate.
Revolving Credit
Revolving credit provides a set amount of credit that you can borrow from repeatedly if
you stick to the terms. You'll have the flexibility of using your credit freely while making
minimum payments toward your outstanding balance.
Both installment and revolving credit may charge interest on balances that you repay over time.
Each may also come with additional fees.
Secured credit
requires you to provide an asset or assets as collateral to get the loan. If you default on
the credit agreement, the lender can take your collateral and sell it to pay your balance.
Mortgages, auto loans, and secured credit cards are examples of secured credit.
Unsecured credit
is not tied to assets that the lender can seize in the event of a default. Unsecured credit,
like credit cards and student loans, tends to have higher interest rates because lenders consider
them a higher risk since there’s no collateral.
2. Types of Bank Loans
Unsecured loans
An unsecured personal loan doesn’t need an asset to be secured against. Instead, it’s
agreed based on things like your credit score or salary. These factors influence how the lender
decides how much you can borrow, and at what cost. Tesco Bank personal loans are unsecured
loans.
Secured loans
This is a personal loan of a set amount of money that has been secured against an asset.
This asset could be a home, car, or something similar. If you don’t keep up repayments on a
secured loan, the bank may use your assets to make up the shortfall.
Payday loans
These are short term loans offering quick access to money needed ahead of your salary or
wages being paid. Payday loans normally have a higher interest rate and are to be paid off within
a month.
Debt consolidation loans
A debt consolidation loan is a type of personal loan that can be used to pay off a number
of different debts. That way, there’s just one monthly payment to remember and one agreed
period and cost for repayment.
Bad credit loans
Bad and adverse credit loans are for people who have a poor credit history. They can be
helpful when you aren’t eligible for an unsecured personal loan and depending on your personal
circumstances, they could be used to help build your rating back up again.
Car loans
There are a few different finance options available when you buy a car, including a
personal loan from a bank. Other possibilities include car finance or hire purchase loans
available from car brokers or dealers.
3. What is Agricultural Credit?
Agricultural credit, which is also commonly referred to as agricultural finance, is an
important component of the economy, especially in countries with arable land since agricultural
products can be exported. Credit is vital to agricultural businesses because it gives farmers
access to capital that might not otherwise be available to them.
4. What is Export Credit?
A credit opened by an importer with a bank in the country of an exporter to finance an
export transaction.
5. What is Public Credit?
Debt issued or traded on the public markets.
