Kredit

Kredit is a financial arrangement in which a lender provides resources to a borrower with an obligation to repay, typically with interest, over a set period. The term is used in many languages and covers various forms of lending, from consumer loans to corporate financing. The core idea is to enable the borrower to obtain goods or funds upfront and to repay over time, reflecting trust between parties and the risk taken by the lender.

Types of credit include consumer credit, such as loans, credit cards and overdrafts used by individuals; mortgages and other long-term loans for housing or major purchases; and business credit, including lines of credit or supplier credits used to finance operations. Credit can be secured, backed by collateral, or unsecured. It can be revolving, allowing ongoing borrowing up to a limit (as with credit cards), or installment-based, with fixed payments over a set term.

How credit works involves an application and underwriting process where the lender assesses the borrower's creditworthiness. This assessment looks at income, existing debt, credit history, and sometimes collateral. If approved, terms are set, including the principal, interest rate, fees, and the repayment schedule. Borrowers are expected to meet ongoing obligations, and defaults can lead to collections, higher interest costs, or damage to the borrower's credit profile.

Regulation and consumer protections vary by jurisdiction but generally require transparency about costs and terms and aim to prevent over-indebtedness. Credit plays a central role in modern economies by enabling consumption, investment, and liquidity, while also exposing borrowers and lenders to financial risk.