loan / credit
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loan
An amount of money that a bank or another institution lends to a person or company for a certain period of time and that usually has to be repaid with interest.
Wir haben einen Kredit aufgenommen, um unser Haus zu renovieren.
We took out a loan to renovate our house.
credit line
A financial limit granted by a bank up to which an account may be overdrawn (overdraft facility).
Die Bank hat mir einen Kredit von 2000 Euro auf meinem Girokonto eingeräumt.
The bank granted me a credit line of 2,000 euros on my checking account.
to lose credibility
In a figurative sense, to lose someone's trust or good opinion.
Durch sein ständiges Zuspätkommen hat er bei seinem Chef jeden Kredit verspielt.
By constantly arriving late, he lost all credibility with his boss.
credit
In bookkeeping, the right side of an account, the credit side, where credits are recorded.
Der Zahlungseingang wird im Kredit auf dem entsprechenden Kundenkonto gebucht.
The incoming payment is posted as a credit on the corresponding customer account.
The most important verb used with a loan is 'aufnehmen' (to take out). Other common verbs are 'beantragen' (to apply for), 'bekommen' (to get), 'zurückzahlen' (to pay back), or 'tilgen' (to repay/pay off).
Viele junge Familien müssen einen Kredit aufnehmen, um ein Haus zu bauen.
Many young families have to take out a loan in order to build a house.
The phrase 'auf Kredit kaufen' means that you buy something without paying for it in full immediately. So you pay for it later or in installments.
Er hat sich sein neues Auto auf Kredit gekauft.
He bought his new car on credit.
A general 'Kredit' (loan, meaning 1) is often a large sum for a specific purpose. A 'Kredit' (credit line) on a checking account (meaning 2) is usually a smaller, flexible limit (overdraft facility) that the bank grants you.
Für das Auto braucht er einen Kredit von der Bank.
He needs a loan from the bank for the car.
The idiom 'seinen Kredit verspielen' has a figurative meaning. It means that you lose someone's trust or good opinion.
Mit dieser Lüge hat er bei mir seinen ganzen Kredit verspielt.
With that lie, he lost all credibility with me.
In accounting, 'Kredit' (credit) is a technical term for the credit side, that is, the right side of an account. This meaning is only relevant in this specific context.
Wir buchen den Zahlungseingang im Kredit.
We post the incoming payment as a credit.
financing
Both words can refer to money for a specific purchase. However, financing describes the overall process of obtaining the money or the financing arrangement, while a loan means the borrowed amount that must be repaid. Use „Finanzierung“ for the overall plan and „Kredit“ for the specific borrowed capital.
Für den Autokauf hat uns die Bank einen Kredit von 15.000 Euro gegeben.
For the car purchase, the bank gave us a loan of 15,000 euros.
Für den Autokauf haben wir eine Finanzierung mit Eigenkapital und monatlichen Raten gewählt.
For the car purchase, we chose financing with our own funds and monthly installments.
