The loan can be secured. Securing loans. Main types of loan collateral

It should be remembered that the main condition for repaying the loan is the ability and desire of the borrower to repay the principal amount of the loan and the interest accrued on it. In banking practice, various methods are used, in particular:

in the form of real estate or movable property provided to cover a debt in the event of non-payment by the debtor;
personal (), which is an obligation of a third party to repay the debt in case of non-repayment by the borrower.

The final lending decision should be based on an assessment of the borrower's credibility and ability to repay the loan, and not depend on the proposed collateral or guarantees. However, the issue of collateral or guarantees becomes important if, for unforeseen reasons, the borrower is unwilling or unable to fulfill its obligations.

Obtaining collateral or guarantees is a rather risky business, which is accompanied by numerous difficulties. Problems often arise when the lender needs to use the collateral. A pledge or guarantee may be an illusion when:

it is very difficult to legally collect security;
it turns out that the mortgaged property does not have an expected resale value;
the guarantor does not have the necessary financial resources to repay the debt.

The deposit is a kind of “fire extinguisher”, and as such it must be effective and easily implemented.

2. Effective right to security

To avoid the above-mentioned difficulties, the bank must:

carefully assess the current and potential value of assets, which the borrower usually tends to overestimate;
adhere to legally and administratively complex procedures from the very beginning.

A good collateral satisfies the following requirements:

has a certain value and can be sold at this value.
this value is stable, and, if possible, tends to increase over time, or at least is predictable and will not decrease, ahead of the repayment of the loan (for example, equipment, vehicles);
the bank can easily collect and sell the collateral, with minimal legal costs.

2.1. Pledge agreement

To obtain ownership of the collateral, the lender must:

sign a written pledge agreement;
the borrower must assign ownership of the relevant assets to the lender.

The pledge agreement must contain the following information:

description of the assets pledged;
the presence or absence of other rights to lien property for debts;
a condition determining who should own the collateral and where it should be stored;
conditions obliging the borrower not to sell or otherwise dispose of the collateral (except in cases where this collateral is replaced by similar assets), to provide sufficient insurance, to keep the collateral in good condition, and to pay all taxes associated with it on time;
a list of cases of non-fulfillment of the contract, allowing the bank to collect the collateral and sell it.

2.2. Transfer of ownership of the collateral to the creditor

For a pledge to have legal force, it is not enough to have a written pledge agreement. The contract must be properly registered and certified so that it is binding on the parties to the contract, as well as third parties. The legal registration of a pledge determines the right of claim regarding the subject of the pledge and establishes the order of priorities among claimants. If there is a conflict of interest, the creditor must finalize its right to security, i.e. register the loan agreement and the pledge agreement with a notary.

3. Pledge of certain types of assets

Main types of collateral and its features

Type of assets	Feasibility/risks
Real estate	The asset will remain in its place, but its value may change; problems may arise with the sale of the asset, for example, if it is an apartment in which a family with minor children lives
Equipment	Property may disappear. It depreciates over time. Its resale market value may be very low
Reserves	Property may disappear. Its cost in case of urgent sale may not be known in advance.
Securities	Assets may be illiquid. Their prices fluctuate
Accounts receivable	Depends on the quality of acquired assets

4. Subordination of other requirements

The first deposit is always better!

A company that applies for a loan may have debt to several creditors. In such cases, the bank's security interest can be strengthened if one or more of them agree to subordinate their claims to those of the bank. In a typical subordination arrangement, the lender agrees to give the bank priority in repaying the loans. The lender may also agree to subordinate an interest in the collateral. In case of non-repayment, the bank has the right to receive a subordinated part of the collateral property up to the full amount of the debt to the bank.

Subordination can be used to protect against a right of set-off that may arise when two companies owe debts to each other. Subordination is also used by banks in relation to loans provided by shareholders and other persons. In the event of non-payment, the bank loan has priority claims over loans provided by shareholders and other persons. The subordination agreement protects the bank's position on an ongoing basis because the agreement typically specifies that while the bank loan is in arrears, subordinated loans to third parties can only be repaid with the bank's permission. Of course, the creditor should be careful to ensure that the company does not circumvent this limitation simply by obtaining new loans, or paying high salaries and dividends to shareholders or other creditors equal to the amount of the subordinated debt.

5. Personal guarantees and other external security

For most loans to small companies, the lender requires a personal guarantee from the principal owners for the following reasons:

this connects the personal fate of the principal with the fate of the business and emphasizes the seriousness of non-repayment of bank loans;
the owner who has signed a personal guarantee is less hesitant when offering company assets as collateral for the bank;
this allows the bank to have some control over the company's funds, which could otherwise be diverted by shareholders in the form of salaries, bonuses or dividends;
this may be critical if the net worth of the principals is added as a significant support to weak underlying credit collateral.

In some cases, for large companies, the bank requires the following guarantees:

Personal guarantees key officers of the company, regardless of whether they have a high net worth. By receiving a guarantee, the bank reinforces the idea that the company's prospects and the guarantor's own future are closely linked.
Cross guarantees provided by another company. Intercompany guarantees are especially important when the clientele consists of several subsidiaries or several legally unrelated business entities, each of which is owned by the same capital.

When obtaining a guarantee, it is important to review financial statements or other documents confirming the guarantor's ability to repay the loan.

Lender security can be improved if the guarantor pledges specific assets as collateral. These assets may include negotiable instruments, insurance proceeds or policy proceeds, and real property. These assets should be accepted as collateral in the same way as business assets. The filing of security regarding the amount insured or the proceeds of an insurance policy is not considered complete until it is recognized.

The guarantee is considered valid until it is revoked in writing by the guarantor, at which time the guarantor is responsible only for the balance of the outstanding loan. The lender must be careful not to take steps that would reduce the value of the security or increase the risk of the guarantor and therefore render the guarantee invalid. For example, failure by the lender to secure the collateral or the lender's repudiation of the collateral may invalidate the guarantee. In general, the lender must keep the guarantor informed of the status of the loan and obtain the guarantor's consent to any significant changes.

Personal guarantees are sometimes better than collateral because they provide incentives for third parties to force the debtor to repay the loan. However, the flip side of the above is that in case of default, the bank will have to take strict action against its reliable client.

Conditions for good guarantees:

legal aspect (for example, spouses);
assessment of the guarantor (analysis of assets and liabilities);
confirmation of the guarantee (i.e. the guarantee is backed by collateral).

6. Protection against specific risks

6.1. The need to protect against some current risks

The company already has enough commercial and production risks to take on the following risks:

interest rates, exchange rates, commodity or energy prices;
natural events (disasters).

Therefore, they should cover these risks whenever possible using financial and financial methods.

6.2. Hedging of currency/interest/price risks

The borrower should be prepared, to the extent possible (some of the required instruments may not be available to domestic companies), to hedge against:

significant “speculative” risks (ie those affecting more than 20% of assets or liabilities or sales or purchases);
risks that are not “self-eliminating”.

Below are some examples of risks:

Types of risks	Sales	Procurement	Assets	Liabilities
Foreign exchange	sales abroad or products whose prices depend on foreign markets	foreign purchases or products whose prices depend on foreign markets	inventories, accounts receivable, loans issued and guarantees	loans received, debts to suppliers
Interest rates are constant or variable			deposits, loans issued	loans received
Commodity/energy prices		products with high energy intensity/commodity content in quantities where there is no self-control of risks	stocks

These risks need to be identified by the lender (and, of course, the borrower). Tools can serve as, etc. The borrower will need to provide information regarding such hedging.

6.3. Insurance coverage

The borrower must undertake in the loan agreement (as well as in the collateral agreement, with respect to collateralized assets) to insure, whenever possible, assets, operating losses, legal/tax liability (including liability for damage caused by the product ).

Typical commitment:

“The Borrower will insure its assets, including the collateral, with an insurance company acceptable to the bank, against such risks and in such amounts as the bank would require, and will pay all and other amounts necessary to maintain the insurance in full force, and provide the bank with proof of payment of such amounts. The bank must be named in the insurance policy as the recipient of the amount.”

7. Lending without collateral

The bank must have the right to seize funds on its balance sheet belonging to the borrower (unless there is another preferential lien on those funds) to satisfy the debt.

Typical wording:

“If any interest due or any payment of principal, or any part thereof, is not paid when due, the bank shall foreclose the amount of the default on any account in which the borrower has funds sufficient to cover the whole amount due or any was part of it."

“If any amount due for principal, interest or fees is not paid when due, the bank shall be entitled to charge the borrower interest on all such unpaid amounts from the due date until the due date at the rate of __% per annum.” .

The borrower's income must always be accounted for with his creditor bank, through a deposit account. This is an indirect type of guarantee, and it helps monitor the borrower's activities. “No deposit/current/current account – no loan” and “no regular income – no loan” should be the rule.

The repayment schedule must match the expected cash flow schedule.

The loan agreement must be drafted in such a way as to provide sufficient legal support for repayment of the loan.

For a household or small business, the husband and wife must act jointly as borrowers, with (or, failing that, must act as guarantors for each other).

8. Cases of non-fulfillment of the contract

It is recommended to include a clause in the loan agreement and security agreement that stipulates the consequences for the borrower in case of failure to comply with the terms of the agreement. If an event of default occurs, the bank will have the legal right to stop lending, demand immediate repayment of the loan in full, and take ownership and sell the collateral.

Typical wording:

“The lending shall cease immediately, and the bank may give notice to the borrower that all or part of the loan shall be immediately repaid, together with accrued interest and all other amounts due, and terminate its obligations under this agreement, which provides for the termination of the bank’s obligations in the event that:

the borrower fails to comply with the information, financial and other obligations listed below;
the borrower fails to pay any amount due when due, or fails to fulfill any of its other obligations under the loan or collateral agreement;
any indebtedness of the borrower (or any of its subsidiaries) will be subject to prepayment or discharge as a result of the breach or any security provided by the borrower will be enforced;
any statement, representation or warranty given by the Borrower under or in connection with this Loan Agreement, Security Deed or Guarantee shall be found to be untrue in any respect, or (either of the foregoing shall be with respect to the Guarantor);
the borrower (or any of its subsidiaries) ceases, or is threatened to cease, to operate its business, or becomes insolvent or unable to pay its debts as they become due, or the creditor forecloses on all or part of its property, or in relation to such property or part thereof, a manager or judicial administrator will be appointed (or any of the above will take place in relation to the guarantor);
at any time there will be a change in the financial condition of the borrower (or any of its subsidiaries) (or the guarantor), which, in the opinion of the bank, may adversely affect its ability to assume obligations under this loan agreement;
the bank, in accordance with the terms of the pledge agreement, will re-evaluate (monitor) the collateral, which will show that the value of the collateral has decreased by more than __%;
the guarantee will become invalid or the guarantor will notify the bank of its intention to terminate its guarantee;
the bank will not have the right to continue the loan, and the borrower will not have the right to fulfill any of its obligations under this loan agreement.”

9. Terms of loan

The terms of the loan are:

the collateral must be transferred to the bank (a collateral agreement has been concluded) before the loan is issued, and must be specified in the loan agreement;
the bank must reserve the right to make payments directly to suppliers of goods and services of the borrower for the purposes specified in the loan agreement (for targeted lending).

The loan agreement may usually state that the loan will be provided when the bank receives the following documents, certified according to the requirements:

A copy of the loan agreement signed by duly authorized officials of the borrower.
Copies of the borrower's constituent documents, including its articles of incorporation, articles of association, and certificate of incorporation.
A copy of the minutes of the meeting of the highest management body of the borrower, authorizing the execution, execution and execution of the loan agreement and collateral agreement, and containing sample signatures of the borrower's officials authorized to perform such actions.
A certificate signed by the chairman of the board of the borrower stating that the right to receive the loan under this agreement is within the scope of his corporate authority and will not be considered an excess of his or its directors' authority to obtain the loan.
Copies of all decisions, orders, approvals, permits, licenses, privileges, applications and their registration necessary in connection with the execution, execution, enforcement and execution of loan agreements, pledges, guarantees or obligations for the project in respect of which the loan is provided.
An insurance policy indicating that the borrower's assets are insured at the borrower's expense against such risks and in such amounts as are acceptable to the bank. The bank must be indicated in the insurance policy as the recipient of the insured amount.
Required collateral and guarantee agreements.
Copies of certificates from the Bureau of Technical Inventory regarding all real estate owned by the borrower.
Valuation of the collateral performed by independent appraisers accredited by the bank.
Copies of the guarantor's constituent documents, including its constituent agreement, charter and certificate of registration.
A copy of the minutes of the meeting of the highest management body of the guarantor, authorizing the execution, execution and execution of the guarantee and containing sample signatures of officials authorized to perform such actions.
A certificate signed by the chairman of the guarantor's board confirming that the right to issue this guarantee is within its corporate powers.

10. Subsequent control conditions

In order to monitor loan collateral, there must be:

obligation on the part of the borrower to provide information;
the bank’s right to conduct inspections, which should entail reflecting the following obligations of the borrower in the loan agreement.

The borrower undertakes to the bank that it (and its subsidiaries) will:

maintain and prepare all financial statements for presentation hereunder in accordance with generally accepted accounting principles and practices, applied consistently during the term of this agreement, and provide authorized officers of the bank with access to its books of accounts at all reasonable times;
send to the bank no later than __ days after the end of each calendar month (quarter) a copy of its management statements for that month (quarter), including a balance sheet, profit and loss statement and cash flow statement, and financial forecasts for the remainder of the loan term;
send to the bank no later than __ days after the end of its financial year its balance sheet, confirmed by auditors, as well as;
provide the bank with such or any other financial information as the bank may require from time to time.

11. Financial obligations

Typical wording:

“The borrower undertakes to the bank that it (and its subsidiaries) will:

use the income received from the use of the loan exclusively for the purposes set out in the loan agreement;
not to sell, transfer, gift or lease all or a substantial portion of its assets other than in the ordinary course of its business;
not to create or allow the application, without the prior written consent of the bank, of any mortgage, pledge, or other security interest in property or assets other than those created in accordance with this loan agreement, or enter into further arrangements for the purpose of borrowing money or issuing guarantees without prior written consent of the bank;
not to allow any obligations under this agreement to be classified as deferred obligations in relation to any of its other obligations to other financial organizations;
do not enter into agreements that involve capital expenditures without the prior written consent of the bank;
throughout the entire period for which the loan is issued, maintain the validity of all decisions, instructions, permits, licenses, privileges, applications and registrations necessary in connection with the execution, execution, giving legal force and execution of the loan agreement, collateral agreement, guarantees, and obligations for the project in respect of which the loan is provided;
pay any dividends (in excess of __ amount) for any financial year without the prior written consent of the bank;
ensure that the borrower's articles of incorporation, the borrower's share capital structure and the nature of its business (and the business of its subsidiaries) do not undergo material changes.”

12. Other obligations

The agreement may also specify other obligations of the borrower, in particular financial ones. For example, the borrower undertakes to the bank that it will ensure compliance with a number of indicators for which maximum permissible values are fixed:

the debt to equity ratio should not exceed __;
The debt coverage ratio must be no less than __.
The ratio of current assets to liabilities must be no less than __.
the ratio of liquid assets to the amount of debt obligations must be no less than __.

This principle expresses the need to ensure the protection of the property interests of the lender in the event of a possible violation by the borrower of its obligations and finds practical expression in such forms of lending as secured loans or financial guarantees. This principle is especially relevant in times of economic instability.

Targeted nature of the loan.

Applies to most types of credit transactions, expressing the need for the targeted use of funds received from the lender. Finds practical expression in the relevant section of the loan agreement, which establishes the specific purpose of the loan, as well as in the process of bank control over compliance with this condition by the borrower. Violation of this obligation may become the basis for early revocation of the loan or the introduction of a penalty (increased) loan interest rate.

Differentiated nature of the loan.

This principle determines a differentiated approach on the part of a credit institution to various categories of potential borrowers. Its practical implementation may depend both on the individual interests of a particular bank, and on the state’s centralized policy of supporting certain industries or areas of activity (for example, small businesses, etc.).

Commercial loan

A commercial loan is a loan provided by legal entities associated either with the production of goods or with their sale to each other when selling goods in the form of deferred payment of money for goods sold. The instrument of this loan is commercial bills. The most widespread are two forms of bills: a promissory note containing the borrower's obligation to pay a specified amount to the creditor, and a bill of exchange (draft), which represents in writing an order to the borrower from the creditor to pay a specified amount to a third party or to the bearer of the bill.

CC is the basis of the entire credit system; its necessity stems from the reproduction process itself. Due to a number of reasons (differences in the time of production of goods and the time of their circulation, the seasonal nature of the production and sale of some goods), some producers are already bringing their goods to the market, while others have not yet sold their goods, and therefore they do not yet have cash. Under these conditions, the former can sell their goods only by selling them on credit. Commercial credit only speeds up the sale of goods and the entire process of capital circulation. It is also necessary in the relationships between industrial and commercial operations.

However, QC is limited to certain limits. First of all, the size of the reserve capital available to the parties: each of them can sell on credit only to the extent that it has surplus capital. Further, the size of the capital capital depends on the degree of popularity of reverse capital inflow. Thus, during crises, when the regular inflow of capital is disrupted, the size of the capital contract is reduced. And finally, CC has a strictly limited direction: it can be provided by industries producing means of production to industries consuming them, but not vice versa. An engineering plant, for example, can sell looms on credit to a textile factory, but the latter cannot provide commercial credit to the former.

The average cost of CC is always lower than the average bank interest rate for a given period. When a transaction is legally completed between the lender and the borrower, the fee for this loan is included in the price of the product, for example, through a fixed percentage of the amount.

BANK LOAN

BANK CREDIT – credit provided by banks to borrowers in the form of cash loans. There are the following significant differences between CC and BC.

Firstly, the object of a commercial loan is commodity capital, while the object of a bank loan is monetary capital. A commercial loan is provided to legal entities associated with production and trade in the sale of goods and services this sale. Here, loan capital is still merged with industrial (or commercial) capital - entrepreneurs lend capital that is at one of the stages of its circulation, capital in commodity form. With a bank loan, loan capital is separated from industrial and commercial capital.

Secondly, the CC differs in the banking unit by subject, i.e. participants in credit transactions. In a commercial loan, both the lender and the borrower act as legal entities. With a bank loan, only one of the participants in the credit transaction - the borrower - acts as a legal entity, the other participant - the lender - acts only as a financial and credit organization.

Thirdly, the dynamics of commercial and bank loans are also different. As for commercial credit, its movement is parallel to the movement of industrial capital: with the growth of industrial production and trade turnover, both the supply of commercial credit and the demand for it increase. The situation is different with a commercial loan. An increase in the supply of loanable capital transferred through bank credit does not always reflect an increase in production. Thus, during periods of depression, the supply of loanable capital increases significantly, not because the size of production expands, but because production has greatly decreased as a result of the crisis and cannot absorb most of the capital that was previously employed in it. In turn, the increase in demand for loan capital does not always reflect the expansion of production (during crises there is a large demand for loan capital, although the size of production is reduced).

Bank credit transcends the boundaries of commercial credit. With the help of a bank loan, not only can one party transfer part of their reserve capital to others for temporary use, but also receive additional capital from funds raised by banks from various classes and strata of society. Bank credit is not limited in its direction: through it, money capital released in one industry can be directed to any other branch of production (for example, from the textile industry to mechanical engineering).

Classification of bank loan.

Repayment terms.

Call loans that must be repaid within a fixed period of time after receiving formal notice from the lender. Currently, they are practically not used not only in Russia, but also in most other countries, because require relatively stable conditions on the loan capital market and in the economy as a whole.
Short-term loans, provided, as a rule, to compensate for a temporary shortage of the borrower's own working capital. The totality of such operations forms an autonomous segment of the loan capital market - the money market. The average repayment period for this type of loan usually does not exceed six months. Short-term loans are most actively used in the stock market, in trade and the service sector, in the interbank lending regime. In modern domestic conditions, short-term loans, which have become clearly dominant in the ship capital market, are characterized by shorter terms, usually not exceeding one month; interest rate, which is inversely proportional to the loan repayment period; servicing mainly the sphere of circulation, because are not available due to prices for production structures.
Medium-term loans provided for a period of up to one year (in domestic conditions - up to three to six months) for purposes of both a production nature and a purely commercial nature. They are most widespread in the agricultural sector, as well as when lending to innovative processes with average volumes of required investments.
Long-term loans, usually used for investment purposes. Like medium-term loans, they service the movement of fixed assets, characterized by large volumes of transferred credit resources. They are used for lending for reconstruction, technical re-equipment, and new construction at enterprises in all fields of activity. Particular development has been achieved in capital construction, the fuel and energy complex, and raw materials sectors of the economy. The average repayment period is usually from three to five years, but can reach 25 years or more, especially if appropriate financial guarantees are received from the state.

Repayment method.

Loans that are repaid by a lump sum (payment) from the borrower. A traditional form of repayment of short-term loans, very functional from the standpoint of legal registration, because does not require the use of a mechanism for calculating differentiated interest.
Loans repaid in installments over the entire term of the loan agreement. The specific conditions (procedure) for return are determined by the contract, including in terms of anti-inflationary protection of the interests of the creditor. Always used for long-term loans and, as a rule, for medium-term ones.

Method of charging interest on loans.

loans on which interest is paid at the time of its total repayment. A traditional form of payment for short-term loans in a market economy, which has the most functional character in terms of ease of calculation.
Loans on which interest is paid in equal installments by the borrower over the entire term of the loan agreement. A traditional form of payment for medium- and long-term loans, which is quite differentiated depending on the agreement of the parties (for example, for long-term loans, interest payments can begin either after the first year of using the loan or after a longer period).
Loans, the interest on which is withheld by the bank at the time of its immediate issuance to the borrower. For a developed market economy, this form is absolutely uncharacteristic and is used only by usurious capital.

Availability of collateral.

Trust loans, the only form of security for repayment of which is the loan agreement itself. They are used to a limited extent by some foreign banks in the process of lending to regular customers who enjoy their full trust (backed by the ability to directly control the current state of the borrower’s current account). For medium- and long-term lending, they can be used only as an exception with mandatory insurance of the loan issued, usually at the expense of the borrower. In domestic practice, they are used by commercial banks only when lending to their own institutions.
Secured loans are the main type of modern bank credit, expressing one of its basic principles. The security can be any property owned by the borrower, most often real estate or securities. If the borrower violates its obligations, this property becomes the property of the bank, which, in the process of its sale, compensates for the losses incurred. The size of the loan issued is usually less than the average market value of the proposed collateral and is determined by agreement of the parties. In domestic conditions, the main problem in obtaining secured loans is the procedure for assessing the value of property due to the incompleteness of the process of forming the mortgage and stock markets.
Loans secured by financial guarantees from third parties. Their real expression is a legally formalized obligation on the part of the guarantor to compensate for the damage actually caused to the bank if the direct borrower violates the terms of the loan agreement. The role of financial guarantor can be legal entities that enjoy sufficient trust from the creditor, as well as government authorities at any level. In a developed market economy, they have become widespread, primarily in the field of long-term lending; in domestic practice, they still have limited use due to insufficient trust not only in legal entities, but also in government bodies, especially at the municipal and regional levels.

Purpose

Loans of a general nature, used by the borrower at his own discretion to meet any need for financial resources. In modern conditions, they have limited use in the field of short-term lending; they are practically not used in medium- and long-term lending.
Targeted loans implying the need for the borrower to use the resources allocated by the bank exclusively for decisions determined by the terms of the loan agreement (for example, payment for purchased goods, payment of wages to staff, capital development, etc.). violation of these obligations, as already noted, entails the application of sanctions established by the contract to the borrower in the form of early revocation of the loan or an increase in the interest rate.

Each of us at least once in our lives needed a cash loan. It can be useful in any life situation. But sometimes it is not possible to borrow from friends or relatives or you simply don’t want to show your critical financial situation. In this situation, the only way out is to contact one of the many financial organizations. But what if your credit history is badly damaged or there is no way to document your income? There is a way out. It is worth taking out one of the types of secured loans.

What is a loan

A loan is one of the types of consumer loans, which is issued for a certain period of time and at an individual annual rate.

Loans can be of different types and categories. It could be:

consumer;
targeted loan;
credit card;
installment payment card;
mini-loan;
a loan secured by certain property.

The main types of secured loans are:

loan secured by real estate;
pledge of any transport property or pledge of vehicle title;
a pledge secured by a third party, that is, a loan secured by a guarantee.

The term, amount of the loan and the interest rate on it directly depend on the main type of loan collateral.

Who can take out a loan and what documents are needed?

Forms and types of secured loans vary, but the requirements for the borrower remain unchanged. To receive a cash loan, any potential borrower must meet standard requirements. These are:

Availability of a valid passport of a citizen of the Russian Federation.
It is necessary to have permanent registration in one of the many regions of the Russian Federation.
The borrower must be at least eighteen years old.
The potential borrower must have at least three calendar months of work experience at the place of work indicated in the application form.
It is advisable to provide the bank with a certificate confirming income in the bank form or 2 personal income tax, but with any type of loan repayment security there may be no need to provide a certificate.
Certificate of ownership of your own property.

In addition to the main package of certificates, in order to increase the likelihood of a loan and reduce the interest rate on it, the following documents should be provided to the financial institution:

driver's license;
voluntary health insurance policy;
TIN of the potential borrower;
a foreign passport, which should preferably contain marks of travel abroad for the last six months or twelve months.

Types of collateral

To secure a loan, types of collateral can be varied. It is possible to pledge an apartment or dorm room, as well as a private house or land property.

Types of loan repayment security include:

Collateral from any real estate. They can serve as a primary or secondary housing apartment.
Pledge of a land plot with or without communications.
Pledge of a car or other vehicle, including a construction vehicle.
Pledge against the signature of a surety person.

Pledge of property

One of the most popular types of loan collateral is property collateral. They can be any real estate, including apartments in a residential building, dorm rooms, or any premises that can be rented out.

In order to provide the bank with a pledge of real estate property, it is necessary to present to the bank documents confirming the ownership of the real estate.

When registering equipment or precious metals as collateral, no certificates are required; one passport will be sufficient. You can also prepare documents and receipts that record the purchase by a specific person.

Vehicle pledge

An equally common type of loan collateral is the collateral of any vehicle.

To do this, the potential borrower must provide the bank with a certificate of ownership of the property. This vehicle can be a personal car, or trucks, cranes, and so on. The presence of a passenger vehicle is one of the most common types of loan collateral. To do this, it is enough to provide a technical passport for the car to a bank or any other microfinance organization.

In order to offer an existing vehicle, other than a title, as collateral, you must:

provision of a passport;
availability of SNILS, for older people it will be replaced by a pension certificate;
salary certificate;
and, of course, a mandatory document will be a certificate of ownership of the vehicle.

Ensuring repayment by a third party

In addition to the above types of bank loan security, there is a loan guaranteed by third parties.

Any citizen of the Russian Federation who is twenty-five years old can act as a guarantor. The guarantor, in addition to the passport, is obliged to provide the financial institution with a certificate confirming his income. It can be issued in the form of a bank or 2 personal income tax. In this case, the guarantor’s income for the last three months should not be less than fifteen thousand rubles per month.

In the event that a potential borrower is unable to make payments on his loan obligations, then they pass to the shoulders of his guarantor. He will be required to make monthly loan obligations.

Apartment deposit

One of the well-known types of security for a bank loan is the pledge of an apartment. This includes mortgage lending. It is worth doing this, since the apartment or other residential premises becomes the property of the borrower only after full repayment of all loan obligations to the financial institution.

In case of failure to fulfill loan obligations, any of the pledged real estate becomes the property of the bank.

Required documents

Once the type of security for a bank loan has been determined, it is worth putting in order all the documents necessary for this procedure.

First of all, you should make sure that the passport with which you confirm your identity as a citizen of the Russian Federation is valid. Otherwise, you can forget about getting a loan. And it doesn’t matter whether he is provided with anything or not.

The presence of the borrower's SNILS is also necessary. It is required to check the credit history of a potential borrower at any financial services bureau.

Is it worth taking out a secured loan?

Whether or not to take out a loan secured by movable or other types of property, as well as on behalf of third parties, depends only on the solvency of the potential borrower of the financial structure.

If a bank's future loan client is not completely confident in his solvency, then it is better not to risk his property. In cases where the borrower is reliable and the loan security is necessary only to lower the annual loan rate, then it is definitely worth using it.

The services of a guarantor should not be neglected by borrowers who have just turned eighteen years old or, conversely, the potential client has just retired.

It is worth considering that in case of evasion of obligations to repay the loan provided by the bank, the property left as collateral will be confiscated.

Well, if a specific person vouches for a potential borrower, then all loan obligations will be transferred to him.

It is for this reason that the question of whether it is worth leaving your property as collateral for a financial organization remains open to this day. To some, this offer seems to be the most profitable, but others only accept it as a last resort.

Whatever the situation you find yourself in, it is worth considering all your risks, whether you are ready to sacrifice your movable or immovable property or whether it will really only be a clear security and proof of your solvency.

More confident in repayment (a mandatory feature of a loan), which has a positive effect on lending conditions. Some call loan collateral insurance against unscrupulous, problem borrowers, who often failed to fulfill loan obligations in the past, spoiling the loan.

Credit collateral is a very common phenomenon. In the case of , the collateral for the loan is the housing being purchased, and if taken, it is the collateral.

Some lenders make loan collateral a requirement. This significantly reduces the risk of non-payment of loan funds and interest. For some, the conditions are even stricter - collateral is mandatory.

Types of loan collateral

The most common form of loan collateral. It involves, in exchange for funds received from the lender, the transfer of property, property rights or valuables in an amount higher than the amount of the loan and interest. Pledge can be expressed by the transfer of rights to real estate (mortgage), transport, securities, jewelry, goods, etc. The mortgagor can be either the borrower or another person. In case of non-payment of the loan, the mortgagee has the right to sell the property at public auction. All this happens after sending the borrower a notice of the commencement of forced collection. There is a distinction between collateral held by the lender (mortgage) for the duration of the loan and that held by the borrower (if the documents are prepared accordingly). The collateral often needs to be insured, and life and health insurance for the borrower is also often required. The second is almost always optional, but can reduce interest on the loan by 0.5-3%.

Another type of loan collateral is credit surety. Its essence is quite simple - an individual or legal entity agrees in writing to repay loan payments if the borrower himself does not do so. This person (or persons) can be either a stranger or a close relative of the borrower. The guarantor is often called a co-borrower who does not claim part of the loan funds received. The guarantor can guarantee the timely repayment of both the entire loan amount and part of it. When repaying a debt obligation to a creditor, the guarantor has the right to demand the funds paid from the borrower; or forgive the debt. The borrower is obliged to promptly notify the guarantor about the status of the loan in order to prevent both payments and reciprocal payments. If neither the borrower nor the guarantor repays the loan on time, the lender can take legal action against both the borrower and his guarantor.

In addition, both the main and additional security for the debt can be guarantee– or another organization, including a credit institution. The guarantor can vouch, guarantee the payment of part of the debt, or the entire amount of the loan. If the loan was paid not by the borrower, but by the guarantor, the latter has the right to demand from the debtor the amount paid to the creditor, as well as expenses incurred by repaying the loan.

Collateral is property (or rights to property) or valuables provided by the borrower (or another person) to the lender to secure a loan, guaranteeing the return by the borrower of the funds received as a loan, as well as accrued interest for using the loan. The collateral can be real estate, cars/motos, household appliances, securities, bank deposits without the possibility of early withdrawal, precious materials, equipment, etc. The mortgagee can be a bank, a credit organization or private creditors. A loan with collateral is almost always not, and can be spent on any needs of the borrower.

A separate agreement is usually created for the pledge. It must indicate the detailed characteristics of the collateral and the estimated value. The appraisal is usually made at the expense of the mortgagor, regardless of whether the loan is issued or not. An appraiser often needs to be selected from a list offered by the lender.

If property is being mortgaged, the permission of the borrower's spouse is required.

Collateral, as a rule, increases the maximum loan amount (within 50-80% of the value of the property), improves the terms of the loan - increases the loan term, reduces the interest rate. It provides an almost one hundred percent chance for the mortgagee to return his funds. There are practically no downsides to this security for the lender, except perhaps the storage of the collateral (and even then, the borrower himself often pays for this). For the mortgagor, on the contrary, there are quite a lot of disadvantages. If the loan is not repaid within the established time frame, the pledged property almost always goes to the creditor (in rare cases, in court it is possible to obtain the pledged object by paying the entire, or almost the entire, amount of the loan; or to receive part of the money after selling the property at auction). Another disadvantage may be that the object or item serving as security has limited capabilities. The apartment cannot be changed, it is impossible to cross the border by car, etc.

If the property is already pledged, it is impossible to secure it again.

Often a deposit is required, especially when:

The permitted portion of the income does not cover the required monthly loan payments;
The total loan amount is very high, and the credit institution cannot issue such a loan to an individual;
Unsuitable conditions for the borrower, including risks of non-repayment;
Bad credit history;
Other conditions of the lender.

Often the collateral is not physically held by the lender, but only legally. Apartment, car, plot, etc. remains with the borrower, and the rights to the property are formalized as collateral. In this case, the debtor assumes the obligation to maintain the collateral and notify the creditor in the event of loss or damage to the property.

The lender may require the collateral to be insured for a period equal to or greater than the term of the loan agreement. The amount of insurance must not be lower than the estimated value of the collateral property. Payment of funds, in case of loss or damage, is sent to the creditor. In some cases, the lender also includes life and health insurance for the borrower as part of the loan terms. If the collateral is not insured, and is damaged or lost, the lender and borrower agree on further actions. Another pledge can be made, the loan can be quickly repaid, etc. If a common language is not found, the creditor files the case in court. They have the right to either leave the loan agreement the same or oblige the borrower to repay the remaining part of the loan within a specified period of time, from a month to several years. Otherwise, the court will seize other property and order it to be sold at public auction. The funds received are sent to the lender to pay for court services, and the remainder is returned to the borrower. Both the lender and the court will be affected by the conditions under which the previous collateral became unusable.

A secured loan is a mutually beneficial option for credit relationships. The lender receives a guarantee of payment of funds, and the mortgagor receives good lending conditions.

Every year, the bail institution receives amendments that reduce the chances of the pledger challenging the bail in court. The lending system is constantly being improved, the so-called lending scales are regulated. On one side of the scale is the lender making a profit, on the other is the borrower having funds at his disposal.

Responsibility of a third party for the borrower's fulfillment of loan obligations to the lender. To ensure proper execution of documents, an additional document must be attached to the loan agreement - a surety agreement.

In a surety agreement, on one side the guarantor acts directly. On the other hand, most often it is a lender, sometimes a borrower or another person (depending on the legislation of the country, the lender, preferences, etc.). A surety agreement differs from a guarantor in that it is not part of the main loan agreement and, although convincing, is not guaranteed by a serious organization to return the funds. Depending on the loan amount, the reputation of the borrower and third parties, a bank or other credit institution has the right to require several guarantors.

The guarantor is called by the borrower to additionally ensure the repayment of the loan; he can guarantee the return of both part of the loan and the full amount, as well as interest for using the loan. In addition, the guarantor can take the initiative and, after the bank’s permission, independently repay the entire loan amount. An enterprise that has funds to operate, but does not have “free” finances, cannot act as a guarantor.

The guarantor's liability may be:

Solidary. The credit institution has the right to choose which invoice and to whom to send it for payment, i.e. both the borrower and the one who guaranteed the payment are equally obliged. As a result, the guarantor may pay more (for example, if income is higher) than the borrower. Often, the bank sends payment of the full amount to both the debtor and a third party; and after the account is paid off by one, the other cannot deposit funds.
Subsidiary. The credit institution sends an invoice to the debtor, and if he does not pay (or partially pays), presents the invoice to the guarantor. In other words, if the debtor pays regularly, the guarantor is not bothered.

The same thing happens when a loan is not repaid and the situation is resolved in court. In the first case, both parties are held liable equally. In the second - the debtor, and if it is not possible to collect the full amount from him, then the guarantor. The court can confiscate both the property of the debtor and the guarantor.

If the borrower refused to pay and the guarantor paid for the loan, the second has the right to demand the money paid, as well as additional expenses caused by this payment.

The guarantee ends after:

Payment by the borrower of the entire loan amount, as well as interest.
Failure of the creditor to properly pay the guarantor for the account. Just as the debtor is obligated to pay, so is the lender obligated to receive the money in the manner specified in the loan agreement.
According to the circumstances of the guarantor, after which payment of the loan becomes impossible. For example, bankruptcy, dismissal from work, illness, etc. This possibility is stipulated in the guarantee agreement.
If the loan agreement is changed or terminated. This may include a change of borrower on the current loan, changes (increase in amount, interest...). In this case, the guarantor must confirm the new guarantee in writing and may refuse to do so.
Expiration of the guarantee period specified in the contract. Or after two years after the end of the loan repayment period, if the creditor has not filed a corresponding claim in court.

If the guarantee agreement is drawn up incorrectly, it has no force (is invalid). The death of the debtor does not relieve the guarantor of the obligation to pay the loan.

When becoming a guarantor, a person must know the borrower well, and even better, be related; Read the agreement carefully and agree to the amount, interest and loan term. The borrower may evade repayment of the loan. For example, to leave the country or by court decision. Circumstances may prevent the borrower from paying, and the lender may refuse to restructure the debt. And all responsibility will fall on the shoulders of the guarantor. The guarantor is regarded by law as a co-borrower, i.e. party interested in obtaining a loan by the debtor. A guarantor who refuses to pay the loan spoils his credit history, just like the debtor. When repaying even a small part of the amount, the guarantor is obliged to keep all documents (payment receipts, certificates, etc.). By acting as a guarantor, a person undertakes obligations that practically exclude him from receiving a loan himself.

There is no need to vouch for the loan of a new work colleague, an old acquaintance or a very distant relative. First you need to find out more about him, soberly assess his solvency, citizenship, registration, marital status, etc.

An individual or legal entity (bank, credit or insurance organization) that guarantees payment if the borrower fails to do so. From a lending point of view, a guarantor is credit collateral that allows the lender to be more confident in repaying the loan and stipulates a high probability of issuing a loan, an increase in the maximum loan amount, a low interest rate, etc. Like other credit collateral, guarantees are required if the lender not confident in the borrower’s fulfillment of his obligations (damaged credit history, large debts from other creditors...)

What is the difference between a guarantor and a guarantor?

In the case of a guarantor, an appropriate guarantee agreement is drawn up, which has many details and subtleties. According to them, the guarantor may not pay the loan obligations assigned to him. The guarantor is considered as a co-borrower, an interested person standing on the same level as the debtor. The guarantor is usually an individual. And people, according to statistics, more often encounter problems when paying a loan than serious organizations, banks or reputable persons with the appropriate license.

The guarantor provides a written undertaking to pay a specific amount if demanded by the creditor. Often, an organization issues guarantees by taking collateral from the borrower and acts as an intermediary between the obligatory lending parties.

In other words, the concepts of guarantor and guarantor are similar in that in both the first and second cases they vouch for the borrower by providing security for the loan, but they differ in that the guarantees themselves are much more reliable than the surety.

A guarantor is a very common type of security for transactions. With it, an authoritative person or organization takes responsibility for one of the parties to the transaction.

Bank guarantees are a written (often on special forms) obligation of a bank (or other credit institution) to pay a specific amount in favor of the lender, if the borrower does not do so in a timely manner. At times, bank guarantees contain many clauses to clarify the circumstances under which payment will occur. The creditor must provide all documents to the guarantor to familiarize himself with the situation and subsequent payment of the debt.

Bank guarantees can be revocable or non-revocable.

Warranties are void when:

The guarantor issued the amount specified in the document;
The warranty period has expired;
If the creditor has waived the right to receive funds from the guarantor (by returning bank guarantees to the organization, or by written refusal of the services of the guarantee organization).

There are several types:

Guarantee of payment of a specific amount (or limit);
Guarantee that the contract will be properly executed;
Mandatory advance repayment;
guarantee;
Securing a credit line;
Customs.

Often, certain funds act as guarantors, which guarantee the return or return for a certain fee. Of course, even when receiving money for their guarantee, fund employees must be confident that the loan will be repaid, even if their requirements for the borrower are not as stringent as for the lender.

These guarantees are usually regarded by the lender as, which, of course, has a positive effect on the transaction.

One of the lending principles is loan security. When providing a loan, the bank reduces its risks by drawing up collateral and surety agreements.

The collateral accepted by the bank for a loan is divided into primary and additional.

Basic support must cover the entire amount of the borrower's obligations under the loan. The amount of liabilities is understood as the amount of the principal debt (loan amount), as well as commissions and fees calculated for a certain period. As a rule, the amount of payments is calculated for a quarter, or for two quarters (depending on the established frequency of interest payments), less often - for the entire period of validity of the loan agreement.

Loan collateral - calculation example

You can independently calculate the amount of required collateral for the loan.

To do this, you need to determine the minimum estimated collateral value - this is the amount of the loan and payments, as indicated above. The estimated collateral value divided by the adjustment factor gives the market value of the collateral.

For example, with a loan amount of five hundred thousand rubles at eighteen percent per annum and a monthly commission of one percent per annum, the calculation will be as follows:

(18+1)/100/365*92*500,000+500,000) = 523,945.21 (rubles) – this is the required estimated collateral value of the loan collateral,

523,945.21/0.6=873,242.02 (rubles) minimum market value of collateral for the requested loan,

Where

(18+1)/100 – interest rate and monthly commission payment (in percent per annum),
365 – number of days in a year,
92 – number of days in the period (this value varies depending on the lending conditions of a particular bank),
5000000 - loan amount,
0.6 is an adjustment factor applied to a certain type of collateral (the value also varies depending on the type of collateral and the lending conditions of a particular bank).

The fee for granting a loan is not taken into account, since the payment of this fee is made at a time before the first provision of credit funds to the borrower.

Main collateral for the loan

In the vast majority of cases, the main security for the borrower’s obligations to the bank is property collateral: real estate, equipment, transport.

The property provided as collateral to the bank may belong to both the borrower himself and a third party. Pledgers can be individuals and organizations. If the pledgor - a third party - is an organization, the bank will ask for a full package of documents (title and financial documents) to analyze the legal capacity and solvency of the pledgor. The financial condition of the mortgagor must be stable; a necessary condition is the absence of negative net assets.

To accept property as collateral, it is necessary to confirm the mortgagor’s ownership of this property. When providing real estate as collateral, this is a certificate of ownership issued by the registration chamber and documents - the basis for the emergence of the right; for transport - a PTS (vehicle passport) and a vehicle registration certificate, and for equipment - confirmation of payment (payment order or commodity and cash register). checks), confirmation of delivery (waybill, invoice and contract).

Less often, especially in times of crisis, inventory items are accepted as collateral: goods for resale or raw materials owned by the borrower. The correction factor here is stricter; in most cases it is 0.5. If inventory items are stored on the territory of another organization, it is necessary to provide the bank with a storage agreement, to which an additional agreement will be concluded to allow the access of bank representatives to the territory where the collateral is stored to conduct ongoing checks of the availability of collateral.

A property pledge agreement, with the exception of a real estate pledge, comes into force from the moment of signing. A real estate pledge agreement (mortgage agreement) is subject to state registration.

As for the equipment accepted as collateral, it should not be stationary, unique, unparalleled, or with a narrow scope of application. The property must have individual characteristics to enable its identification (serial number, inventory number, etc.).

Transport, in turn, must be in good technical condition, running, and no older than a certain age (usually no more than ten to fifteen years).

Real estate accepted as collateral is non-residential buildings, structures, land plots, unfinished buildings (if ownership is registered in accordance with current legislation). Residential real estate is accepted as collateral for a loan if no one is registered in it. Vessels (sea and air) can also act as collateral. The bank must provide extracts from the registration service confirming the absence of encumbrances on the collateral. If there are completed and registered lease agreements with third parties, the bank may require the conclusion of an additional agreement to the lease agreement on termination of the lease agreement in the event that the bank forecloses on the collateral.

For certain lending programs, the following can also be accepted as collateral as the main collateral:

- right of claim under the contract,
- guarantee of the municipality,
- bill of exchange (in most cases from Sberbank of the Russian Federation),
- bank guarantee,
- acquired property, etc.

Let's look briefly at each of these types of security.

Right of claim under the contract accepted as collateral at the residual value of the contract, which is calculated as the difference between the contract amount and the advance payments made. This contract must indicate the condition under which all transfers are made to the borrower's current account opened with the creditor bank, and changes to the contract are impossible without agreement with the creditor bank. The loan repayment schedule is synchronized with the payment schedule under the contract; when revenue is received under the specified contract, it is written off to repay the borrower's debt to the bank.

Guarantee of the municipality (MO) is accepted as collateral if the bank has entered into an agreement with this MO and, in turn, the budget of the MO provides for the costs of providing guarantees for loans to enterprises and individual entrepreneurs.

A bill of exchange (in most cases a bill of exchange from Sberbank of the Russian Federation) is one of the most interesting types of security. On the one hand, a bill of exchange is the same money, but placed in a security for a certain period with certain conditions (on a bill of exchange, the holder of the bill can receive interest from the bank). So, when providing a bill of exchange as collateral for a loan, the bank’s risks are minimized and the requirements for the borrower are correspondingly more liberal, the bank’s discount is much lower.

Bank guarantee can serve as collateral if the creditor bank has set a risk limit for the bank that issued the guarantee.If the purchased property acts as collateral, then a corresponding agreement must be signed between the bank and the seller. And in the purchase and sale agreement signed between the buyer (borrower) and the seller, a condition must be stipulated that when the buyer (borrower) provides the seller with part of the payment (usually ranging from ten to twenty percent) and a letter of guarantee from the bank (or a signed loan agreement, as an option), ownership of the subject of the purchase and sale agreement passes to the buyer. Accordingly, the buyer (aka the borrower) draws up a collateral agreement with the bank, and the bank, in turn, transfers the remaining amount to the seller of the property under a secured loan.