Credit for a person is to obtain funds for covering the necessary costs, on the conditions of a mandatory return, only more than the longer amount.
From the point of view of the bank, a loan is a type of operation, the main purpose of which is to extract the profit. The credit institution offers a borrower for money for remuneration. Due to remuneration, all sorts of risks are covered, costs and profit.
But the bank itself does not produce money, but only gives them as loans on a reimbursable basis.
To calculate the cost of these operations, pricing rules apply: costs + income.
The costs are made up of the amount of money attracting, the costs of servicing borrowers, the development of the bank and stocks.
The interest rate is calculated on the basis of the formula:
% = SPDS + SR + RB + IO + PRIBYL
In order to ensure financial sustainability, the Bank is obliged to create reserve funds. Their minimum size is developing a central bank.
But if you say simply, the bank simply benefits and, accordingly, profit from each loan issued. For people, getting a loan is a receipt of goods or services here and now, but only with the costs that can be stretched for several months or a few years!
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