Until now, it was obvious that a larger loan was drawn up for higher expenses. Today, we also have access to other financial products, such as non-bank installment loans. What connects them with traditional credit and what is different from it? What should we watch out for when taking out an installment loan ?
Replacing home appliances, renovations and other major expenses for many of us means having to borrow money. Until now, we have reached for loans, but we are also more willing to use other financing methods. With larger expenses, installment loans may be the solution. We will get the “rescue” tickets as quickly as possible, and this is their unquestionable advantage. It does not mean, however, that they are products without defects. What should we remember when deciding on this kind of financial obligation?
What exactly is a loan?
A loan is a type of monetary loan granted by banks. Loans are granted at a certain percentage, which is the basis for calculating loan interest, i.e. a fee for the bank. Interest depends on the amount of credit and the period for which it is incurred. Regarding the repayment period, we can distinguish short-term loans up to 1 year, medium-term loans up to 5 years and long-term loans for a period of over 5 years. Loans are a popular source of financing for larger enterprises. Buying a car or flat means expenses that usually have to be spread over the years.
The cash loan is a willingly chosen financial product – mainly because the funds obtained from it can be used for any purpose. The liability is repaid in installments, the amount and timing of which are determined with the bank. Money from a cash loan is often used to cover major expenses, such as a holiday trip or renovation. Some banks offer cash loans of up to PLN 100,000.
Although much is said about the popularity of loans, in fact it is not so easy to get them. The procedure for applying for a loan is complicated, requires time and numerous formalities. For many customers, the conditions set by banks are impossible to meet. This is probably the result of interest in installment loans. The fact that “rescue” is easily available does not mean that we do not take any risk when deciding to submit an application. It is still a financial obligation, which has to be settled, and at a strictly specified time. Therefore, before we decide on this financial product, we should know its specificity.
Installment loans – advantages and disadvantages
We will get installments as quickly as payday loans. As with the latter, the application procedure can be carried out online. Momentifiers and “ratalki” differ in the amount of granted amounts. As long as payday loans are effective in emergency situations, installment loans are a solution for larger expenses. We can spread out the amount of 5,000 zlotys even for 24 months.
Is the “installment” really easy to get? Not completely. “Minimum formalities” does not mean “any formalities.” Because installment loans are a greater financial liability, lenders will require us to issue a certificate of income and a clean history in the debtors’ registers. Some companies even set a net income limit – if we do not achieve it, we will not get a loan.
Before we decide on an installment loan, we should carefully calculate the costs of our commitment. Approximate calculations that can be found on company websites will not give us a full picture. To estimate the total amount of the loan, we must use the table of fees and commissions. It is also worth taking into account the costs that may arise in the case of delayed repayment. Often these are high sums. Although loan companies must adhere to top-down arrangements for additional fees, there is still much freedom in this area.
Before you apply, calculate the costs
Installment loans meet the needs of customers who want to obtain additional cash and higher amounts efficiently. This type of financial support may be useful in case of sudden and at the same time larger commitments. However, it is worth remembering the specifics of non-bank loans.
Although they are provided quickly, most companies charge additional fees. The tools for their estimation can be found on the website, but the calculation is up to the customer. It means that if we decide to install a installment loan, we should precisely determine its costs using the table of fees and commissions, including those that may occur in the case of repayment after the deadline.