Cash and Commitment Loans
According to the classic grouping of bank loans, we can talk about (1) cash loans and (2) commitment loans. The terminology of a loan is also unclear, on the one hand it covers a variety of legal relationships and on the other hand is often confused with a loan.
Austrian credit belongs to the group of cash loans
In the case of (1) cash credit, the bank actually makes available to the borrower a specific amount of money in a bank account or in cash, that is, it actually disburses money (lending). In the case of commitment loans (2), the Bank shall make an irrevocable promise that, subject to certain conditions, it is willing to lend or make payments to its counterparty.
Credit institutions often reject a mortgage loan application if the real estate object of the application is in another country, or if the claimant does not live or receive income in the same country where the credit institution operates. However, they must not discriminate on the basis of their nationality with residents of other EU Member States.
The bank makes its payment ability available to its client
Lending is an extremely risky banking business. Banks lend only to the clients they consider to be creditworthy – businesses. Banks, like all businesses, strive to ensure their profits, their liquidity on a continuous basis, and to develop a loan portfolio that maximizes profits at all risks. In order to make a thoughtful change, it is advisable to pay close attention to letters and mail from your bank and read them carefully.
For more details and accurate information, ask the lender bank for a personal quote. By switching from a variable rate to a fixed rate loan, you can ensure the predictability and predictability of the future, thereby contributing to financial stability, so everyone should think twice!