It is interesting to note that most of our modern terms involving money have origins in the Greek or Latin languages.

The word ‘Credit’ is taken from the Latin ‘Credo’ which roughly translates to “I Believe”, a fitting meaning to reinforce a tradition of trust that involves monetary transactions. In the days of yore, lending and borrowing were purely done by guarantee through the spoken word rather than the written word. Credit in olden days did not necessarily involve money and the term was used to describe barter exchanges of goods and services.

However, in modern economy, the term credit denotes a transaction involving money. Nowadays long drawn contracts and agreements, most of them worded with legal terms that are beyond the comprehension of ordinary people, fulfill the obligations of lending and receiving.

Credit means deferred payment or payment at a later date for receipt of money, goods or services. The deferred payment (late payment) is what is known as “debt”. Credit is given by a creditor or lender to a debtor or the borrower.

A specified sum of money given to an individual for education, family, household, personal and vehicle purposes is termed a ‘loan’, also called consumer credit, consumer lending or retail lending.