Financial Education

Our financial education section offers resources and information to help you learn more about personal finance and investing in order to achieve your financial goals.

What types of loan products are there?

There exist various types of loans, and the choice among them depends on the specific purpose for which you are borrowing money.

Consumer loans

A consumer loan is obtained for personal use or to purchase specific goods and/or services. It can be used to finance household appliances, small household items, daily necessities, travel, and other regular expenses. Consumer loans are typically short-term and come with relatively higher interest rates.

Car loans

You may have come across terms such as auto loans or student loans, which are also types of consumer loans with specific purposes. These loans are intended for purchasing a vehicle or financing educational expenses respectively. The borrowed money in these cases is designated for the specific product or service mentioned.

An Installment

Installment loans are indeed another type of consumer loan that serves a specific purpose. These loans are provided to customers for the purchase of specific goods or services from a trade or service company. The installment payment process is typically quick and can be done directly at the point of purchase. However, it's important to note that the cost of goods or services may be higher when purchased in installments compared to purchasing them outright.

A Credit Card

A credit card is a plastic payment card issued by a bank or microfinance organization with a predetermined credit limit. With a credit card, you can make purchases on credit within the approved limit at physical stores, online shops, or through e-commerce platforms. Additionally, credit cardholders have the option to withdraw cash from ATMs, although it's important to note that cash withdrawals usually come with higher fees compared to making purchases.

Credit cards often come with a grace period, which is a specific period of time during which the cardholder can pay the minimum required payment without incurring interest charges. If the cardholder chooses to pay the full outstanding balance within this grace period, they can avoid paying any interest charges.

It's important to manage credit card usage responsibly and make timely payments to avoid accumulating high-interest debt.

An Overdraft

An overdraft is a short-term credit facility that is linked to a current account. It is typically associated with a salary card and allows the account holder to exceed the available balance in their account, up to a predetermined limit. The overdraft limit is often based on a certain multiple of the individual's salary. The overdraft amount can be used to cover expenses or make withdrawals, and it is expected to be repaid from the salary or other sources of income deposited into the same account.

While an overdraft may seem similar to a credit card, there are some key differences. With an overdraft, the credit limit is granted on the same account where the borrower receives their income. When the money is deposited into this account, if there are sufficient funds, the overdraft amount is fully covered. In contrast, a credit card is typically associated with a separate account, and a minimum payment is required to cover the amount spent on the card. The borrower is given a specific timeframe to repay this amount. Unlike a credit card, an overdraft does not usually offer a grace period for interest-free repayment of the utilized amount.


You may be familiar with the concept of a mortgage loan. A mortgage loan is specifically designed for the purpose of purchasing, constructing, or renovating real estate, such as a house, apartment, or land. When obtaining a mortgage loan, the property itself serves as collateral, providing security for the loan. In the event that the borrower fails to repay the loan, the financial institution has the right to sell or repossess the property.

Mortgage loans are typically long-term in nature, with a maximum term of 20 years for loans issued in the local currency (GEL). Due to the reduced risk associated with mortgage loans, they generally offer lower interest rates and longer repayment periods compared to other types of loans.