Well, almost everyone needs credit to meet the everlasting desire of wanting. Who gives you credit? Any financial institution will give you credit based on your capacity. So, “the amount of credit you can get from the financial institution is called bank credit”
Bank credit is not just the credit you can get from a single source or financial institution. Bank credit is the total sum of money or credit you or the company or any organisation can get from all the financial institutions combined.
Factors affecting Bank Credit
The amount of credit you can get from the bank depends up on many factors
- Your capacity to repay the credit ( it includes collateral, what is the income you earn, banks are very investigative to verify all these details)
- Your previous record with the bank ( whether you have a good credit record or bad credit record )
- Your credit rating / credit score
- Availability of credit with the bank (the amount of liquid cash the bank have)
As different banks have different rates of interest, the amount of credit you take also decides your rate of interest on bank credit.
Note : It has become a norm these days to use credit which can out numbers the amount you can repay. It is a bad practice and please stay away from it.
