Terms and definitions

Firstly let's understand, what kinds of credits exist and figure out the definitons:

The consumer credit - the credit which is given to physical persons for purchasing the goods of personal consumption.

The autocredit - the credit which is given for buying a car. For the period of return of the credit the car is seld in the mortgage.

The hypothecary credit - the credit for the real estate purchasing. During the term of the credit repayment, the real estate is made out in the mortgage.

These are the basic kinds of credits. Except for them there is a set of other types of credits such as the international credit, the state credit, the bank credit, the loan credit.

Credit term - is a period, on which credit stands out.

The interest rate - is a payment for using the credit. It is expressed, usually, in percentage of the sum of the credit counting upon any period of time. More often per/in a year. For example: 10 % per year, or 10 % annual.

Liabilities on the basic debt - the sum used, but still not extinguished credit which is determined to a concrete date.

Cost of the credit -the sum, paid by the borrower of the credit to its creditor, besides the sum of the credit itself.It consists of percent of the credit, other possible commissions (for example invoice servise, cash delivery), the insurance premium (in case the credit is insured) and various gathering (for example, lumpsum gathering for the credit delivery).

Annua payment is a monthly payment for the credit which includes the sum of the added percent for the credit and a part of the basic debt. Annua payments are applied practically to all kinds of the credits which are given to physical persons because this kind of estimation is convenient for the clients and is favourable to the financing organizations. From annua payments the bank receives a little higher income of percent, and this kind of estimation is more convenient and clear for the client: every month the borrower pays the same sum of money on account of credit repayment and can count the budget down to the ending of payments. Instead of sharing from the amount of returned debt, at annua payment the certain sum of payment for the credit is fixed in the contract . The amount of annua payment is an average sum of money which doesn't depending on the period of credit repayment. At the beginning of the repayment period, the structure of such payment consists of percent of the credit and of the small part a "body" of the credit (a sum which the client has received actually). In some time this proportion levels and by the end of the period of repayment the basic debt is paid only.

The differentiated payment consists of the repayment of a credit "body" divided to all period and a variable part of its percent which is taken from the sum of the rest. That is at the differentiated payments the credit is paid by equal shares during all term of repayment. Thus, the amount of the general payment decreases every month asthe repayment of the basic debt is distributed into regular intervals for all the credit term. The differentiated payments fall on the borrower as rather heavy load in the first years of hypothecary credit estimation. But approximately from the middle of crediting payment term the mortgage considerably decreases.