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!!!!!Англійська мова для спеціальностей Економі...doc
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Overdrafts

An overdraft occurs when the holder of a current account is allowed to issue cheques for more than the client has in his account, up to an agreed maximum. The rate of interest can vary during the period of the overdraft and is charged only on the amount overdrawn on a day-to-day basis.

An overdraft can be repayable on demand although in practice banks rarely insist on this. Before granting an overdraft the bank manager will probably not ask for an application form to be completed, but will simply talk to the applicant. An overdraft is, therefore, a less formal method of lending, although the manager must still ensure that the overdraft will be repaid.

A firm will use a loan when buying fixed assets, e.g. machinery or vehicles, where the precise amount to be spent and the time when required are known. A personal loan can be taken out by an individual to buy, say, a car.

A firm will use an overdraft as working capital to buy stock, pay wages etc., where the amount needed is not exactly known and may vary from day to day. An individual can take out an overdraft to cover a period when, for example, he suffers a temporary loss of income, or has to meet unexpected expenses.

Active Words and Phrases:

borrow (money) from a bank

брати позику в банку

grant (a loan)

надавати (позику)

savings

заощадження

rate of interest

банківська ставка

loan

позика

to debit

дебетувати (віднести на дебіт)

repay the loan

повертати позику

credit

записати на кредит

security

гарантія

standing order

регламент, розпорядок

profit

прибуток

overdraft

перевищення кредиту.

income

дохід

Ex. III. Answer the questions:

  1. Describe the basic difference between a loan and an overdraft.

  2. What is the difference between a saving account and a loan account?

  3. How and to whom is interest paid in case of a loan account?

  4. What is a customer asked to complete before he is granted a loan?

  5. In case of an overdraft, how big is the maximum a holder is allowed to issue cheques for?

  6. How long should the overdraft be repayable?

  7. In what case can a firm use an overdraft?

  8. In what case can an individual take out an overdraft?

Ex. IV. Use the following word-combinations in sentences of your own:

  • a sound banking record

  • to make repayment to …;

  • the period of payment

  • to complete a loan application form;

  • income from other sources

  • assess the ability to repay;

  • a security for the loan

  • to issue cheques for;

  • government guidelines

  • the period of the overdraft;

  • to give preference to …

  • to repay on demand;

  • to grant a loan

  • the precise amount;

  • a stated sum of money (period of time)

  • a personal loan;

  • the rate of interest

  • a temporary loss of income;

  • to set up a (loan) account

  • to meet unexpected expenses.

  • to make use of the sum