The differences between the two are as follows:
1. The concept is different: advance payment can be that when we start our own business, start a company or do a project, we put our own money in first, or others help us put it in first. Lending refers to the process of obtaining funds by applying to others or lending institutions and meeting certain qualification access requirements when we encounter capital shortage or turnover difficulties.
2. Different payment costs: Generally speaking, no matter whether we pay in advance by ourselves or others, we don't need to pay interest.
Generally, according to the provisions of the loan agreement, the loan will pay a certain interest at the agreed interest rate within the term of use of the funds.
3. The basis for obtaining funds is different: if someone else advances for us, it is generally based on trust, and there is no need to add additional asset certificates to ensure timely repayment.
In addition to some ways of borrowing by relying on their own credit level, there are some ways of borrowing by mortgaging some high-value assets, and when we can't repay the interest, then the mortgagee has the right to dispose of these mortgaged assets.
4. The nature of assets is different: advances are generally classified as non-performing assets by banks. Borrowing is a normal asset.
5. Different types: The types of advance payment include bank acceptance bill advance payment, letter of credit advance payment, bank guarantee advance payment and foreign exchange loan advance payment. The types of loans include credit loans, mortgage loans, mortgage loans and trust loans.
6. Different ways of obtaining funds: generally, advances can only be obtained through offline channels.
Loans can be applied offline to relatives and friends, commercial banks and loan companies, or online to Internet financial lending institutions.
Is it illegal to advance money?
Maturity is one of the behaviors of private lending. Whether it is illegal or not depends mainly on whether the interest payment complies with the law.
Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases,
Article 1 The term "private lending" as mentioned in these Provisions refers to the financing behavior between natural persons, legal persons and other organizations.
These provisions shall not apply to financial institutions and their branches engaged in loan business established with the approval of the financial supervision department, as well as disputes arising from loans and other related financial businesses.
Article 26 If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except that the interest rate agreed by both parties exceeds four times the market quotation of one-year loan when the contract is established.