What is a lender?: How Much do Loan Originators Make?

Loan Originator

What is a lender

In a very simple way, a Lender is a person who “lends” money to another. For example, it may be a bank lending money to an individual or legal entity; or a company that lends it to another. At this point, that person (natural or legal) becomes another person’s creditor because they gave him money that they must return.

Every day you can meet many people who are lenders: the owner of a rented house (if you live in one), the bank if you have lent money; a supplier if they provided you with a floor and billed you that you haven’t paid yet…

As a general rule, anyone with an outstanding debt becomes a creditor, and the same goes for government agencies (social security, treasury…).

creditor and debtor

When we speak of the creditor, the figure of the debtor inevitably immediately appears, since it is closely related to the first. To make it clear to you, a debtor is a person who is obliged to pay a sum of money to a creditor. In other words, this is a person who receives money from a creditor and then must return it.

So, we are talking about two opposite figures: the creditor, who will be an active subject; and the debtor, who will be the taxpayer of the relationship. In fact, one does not exist without the other. For example, you cannot lend money if there is no one to lend to you, and you cannot return money if no one has lent it to you.

Lender and Supplier

You hear a lot of concepts every day and they sound similar, but they really aren’t. This happens, for example, with a creditor and a supplier. These are two completely different concepts, and at the same time, they are so similar that many people confuse them. Therefore, we will explain both figures to you.

On the one hand, we have a supplier. This is determined according to RAE com. or “said of a person or company: which provides or supplies everything necessary for a specific purpose to large groups, associations, communities, etc.”, or in other words, the person from whom we buy a product or service related to our work activity.

On the other hand, the creditor, according to existing definitions, is the person with whom we have entered into a debt necessary for the operation of the company. BUT, this debt is not related to our work. That is, it allows you to conduct business, but does not affect labor activity.

The most obvious example:

Imagine that you own a coffee shop. The supplier can be the person or company that serves you the coffee. But a lender is a company that provides you with electricity, telephone, running water…

Now often suppliers, providing you with the necessary product (raw materials), become creditors, but technically this is not the case.

Types of creditors

In general, creditors can be divided into two large groups.

Personal lender

This figure alone characterizes the friends or family to whom the payment is due. For example, when you ask your brother for money, or when you lend money to each other between friends.

Many times, and in order to recover a debt, it is recommended to have a legal document setting out how the contractual debt will be repaid.

Real lender

The real creditor is that figure where there is a legal contract between the creditor and the debtor. That is, everything is connected and well connected, to know what is being lent and how it will be returned, and also what to do in case of a claim against the debtor if he does not make the payment he owes by the due date.

However, besides this wonderful classification, there are many other types of creditors that you should be aware of, such as mortgage, inheritance, unsecured, mortgage… In fact, there will be as many creditors as there are types of debts or obligations, so calling them all this can be quite tedious.

How can a person become a lender?

There are many examples these days where you see that you are indeed another person’s creditor. But, according to the Civil Code, a person could become such a figure. if any of these reasons occur:

  • Because there will be a binding contract between two people.
  • Because there is an imperative of the law, in which there is an obligation in relation to another (for example, to spend alimony, pension
  • Civil liability in connection with the crime or action that motivates the situation.

However, the person who is the creditor cannot enforce the obligations when he or she wants, there are a number of deadlines for this, and until they are reached, he cannot force payment. For example, an apartment owner cannot require tenants to pay him a monthly payment for an apartment on the 15th, if it is stipulated that it is paid at the end of the month.

By Master James

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