Credit Credit is simply money available to be loaned to a borrower. People borrow money to pay for products or services and agree to pay back the money owed at a certain agreed time. There are many different types of credit. Bank loans, utility loans, personal loans, and credit card loans are some of the most common types of credit. What is Credit For? People borrow money to pay for services in advance. For example, persons make use of different services such Internet and cable service, or telephone service. These services are only paid at the end of the month or after a two-month period. They may be offered on credit. Another example is obtaining a loan. People need to borrow money in order to purchase tangible products or properties. If one needs to pay for a home, he borrows money from a bank or a mortgage company. The loan is paid off monthly, bi-monthly, or quarterly with interest. People also need credit during times of financial hardship, such as payment for hospital bills or insufficient funds for payroll. Who Provides Credit? Lenders provide credit to borrowers. Lenders can be companies or individuals, with banks being commonly the providers of credit. Banking institutions offer loans to people in need of cash. These loans can be in the form of unsecured or secured loans. Unsecured loans are loans that do not need any form of guarantee. A good credit standing is everything that is required to get good terms. On the other hand, secured loans are loans that come with collateral. Collateral can be any valuable property such as a home, a car or precious jewelry. Credit card companies also offer credit, although most banks offer credit cards as well. A credit card is a card that is used to pay for any type of product or service. It can be used regularly until its credit limit is reached. The interest does not need to be paid as long as the credit is paid in full before or at the due date. After the due date, the company charges interest. Another example of credit is a personal line of credit. With the personal line of credit you have certain amount of money to borrow, which have to be repaid later. Credit unions offer credit to members as well. These financial institutions are controlled by their own members and offer every member reasonable interest rates. Credit unions can be found in most communities and typically have a regional scope. However, some unions also operate on a national or global scale. Individual lenders can also grant credit. The terms of the credit can be stipulated either in an oral form or a written agreement between the lender and the borrower. In addition, pawn shops offer credit in exchange for collateral. Pawn shops accept various types of collateral including jewelry electronic devices, antiques, and other valuables. Interest Rates and Repayment Options Banks, credit card companies, credit unions, pawn shops, individual lenders and other credit institutions offer different interest rates. Before deciding to borrow money, it is a wise idea to check out the best deals. There is a huge competition among the crediting institutions. Some offer better rates than others while repayment options also vary. Certain types of loans need to be paid in a month, with others due on an installment basis. Still others are payable at a stipulated date and time. Canadian banks offer a variety of credit products like personal loans, credit cards, car loans, mortgages, student loans and many more. Our modern society is credit driven, but you have to be very careful not to over-extend your credit and go too much into debt.