Installment loan – what is it, how does it work, for whom?
November 22, 2019
Do you always have to have your own cash to realize your dreams and needs? Well no! Just use the installment loan! Check how not to postpone your dreams, just realize them today.
How not to postpone your dreams?
Do you dream of a new car? Or maybe you are planning a renovation of the kitchen? You can’t stand the rain during your vacation and you are increasingly looking at international tours? I know it very well! Unfortunately, you don’t have a certain amount of money to make your dreams come true? Weeks, months, sometimes years pass and you can’t raise the funds you need? It is in such moments that installment loans come to the rescue. Importantly, unlike a traditional bank loan, installment loans are granted almost immediately after submitting the application. Spreading the commitment into equal installments allows you to finance your dreams here and now, while also allowing you to plan your expenses accordingly. Remember indefinitely postponing dreams for later usually ends with the lack of their implementation!
How does the installment loan work?
An installment loan in simple language is financial assistance offered by non-bank institutions. The concluded agreement with the loan institution obliges the borrower to regularly repay the debt in the form of monthly installments at the amount and time fixed at the beginning and at the agreed cost. Almost everyone who urgently needs money can apply for such support and at the same time is convinced that they will be able to repay it in accordance with the rules established in the contract. Installment loan is a safe product. Even with large sums, monthly installments are not very high, so it can be allocated even to people with very difficult financial situation. On the financial market, we can find many companies offering installment loans. It should be noted that they offer different products and apply different debt repayment rules – always specified in the loan agreement. These differences occur not only in the amount of the borrowed amount, the number of installments and the APRC, but also in the manner of inference and possible documentation of income. Not only persons employed under a contract of employment / work / work assignment, but also Clients receiving income from such sources as pensions, disability pensions, and in some cases even 500+ benefits or alimony benefits may apply for installment loans.
Bank loan and installment loan
Credit and loan are two terms that are often used interchangeably in everyday speech. More than once we hear from friends “I took a loan from a bank”, while actually thinking about taking a bank loan. It is important to realize that from a formal point of view loans and borrowings are not the same. A loan is an agreement whereby the bank undertakes to provide the borrower with an amount of cash for a specific purpose for a specified period of time. However, the borrower undertakes, among others to return the loan amount (including interest) with the repayment deadline, as well as to pay any commission for granting the loan. The possibility of obtaining a loan is strictly dependent on the person’s creditworthiness and history in BIK. In virtually every case, taking out a loan requires proof of income in the form of certificates or confirmations of the influence of remuneration on the account. Credit-related issues are governed by the Banking Act of 29 August 1997 (Journal of Laws of 2012, item 1376, as amended).
Installment loan / payday loan
The installment loan is formally similar to a loan granted by the Bank. Also most often it is made in writing, taking into account all the above information. However, the offer of non-bank companies is granted faster, without unnecessary formalities and with much greater flexibility. Loan companies are trying to adapt them to the expectations of customers and introduce financial products on increasingly favorable terms. If you do not meet the strict conditions set by the Bank, and you need quick financing for any purpose, this solution is just for you. The loan, unlike the payday loan, which must be repaid in full within a fixed and short period of time, is divided into installments payable in a predetermined time. Basic issues related to loans are regulated by the Act of 23 April 1964 – Civil Code (Journal of Laws of 1964, No. 16, item 93).
Where to look for installment loans?
There are many possibilities to take advantage of installment loans. There are currently nearly 400 non-bank loans on the Polish financial market. The register of lending institutions has been kept by the Polish Financial Supervision Authority for several months. First of all, to get an installment loan, you need to find the right financial institution. One of the simple ways to find the right offer for you is to use the advice of a financial agency or mobile advisor. There are several to several such offices in each town. The credit advisor will present us the most relevant offers in terms of the expected loan amount, the amount and amount of the monthly installment, as well as in terms of application flexibility. Formalities connected with taking out a loan in installments are quick and above all convenient. They last much shorter than checking creditworthiness at the Bank. Very often, applying for a loan is limited to providing basic information about the borrower (personal, contact details and information about the source of income received). In principle, in this respect, this product is no different from a regular loan (payday loan).
You can also get it to a bank account or withdraw with a credit check immediately after completing all formalities. To get a installment loan you need an ID card and some other information that should be on the form or application, including information about the source of income. Even simpler solution than visiting a credit bureau is to make such a commitment without leaving your home, i.e. via the Internet. In the network you will find many websites for applying for loans, among others. It combines the benefits of applying (at home) via the Internet, as well as invaluable help in choosing the optimal offer during a personal meeting / conversation with a credit advisor. To sum up, whether it is enough to complete a short application via the Internet or in the company’s office, sometimes make a verification transfer and the amount of the dream loan will be in your account. Very often, nobody will ask you for documents confirming the amount of your monthly income, because there are mainly offers for the so-called “statement”.
Advantages and disadvantages of installment loans
We all know that the medal has two sides. Nothing is perfect, every product or service must have both pros and cons. This is exactly the case in the loan industry. The undeniable advantage of financial solutions offered by companies from the non-banking sector is primarily their high availability. Loan institutions provide support even to those who cannot boast of good financial condition. A large group of borrowers are customers with poor credit history. Among them are many debtors who have other outstanding debts. Equally important is the short time to complete the formalities: from a few minutes to several hours. Installment loans can be obtained up to 40,000, and with simplified conditions on the so-called “Declaration” up to 20,000. High amounts with minimum formalities are definitely an advantage of installment loans. It is also beneficial to spread repayment obligations over several or even several months. Offers with a repayment period of up to 60 months are available on the market. However, this involves a fairly high total cost of the loan.
Various loan comparison websites are helpful in searching for the best financial solution and estimating the installments. The transparency of concluded contracts is also very important for the client, the client knows exactly what the total cost of the contract will be. We must remember that regardless of the conditions for granting the installment loan, we must pay it back! Any delays in paying the installments generate even greater costs. An installment loan is a perfect solution only for people who are convinced that they will have the means to pay the installments on time. The decision to make any financial commitment should be considered. Therefore, it is important to collect data and compare offers to make the best decision. And then your only role is to make your dreams come true. “Dreams are real goals with deferred implementation”. Change it! Redeem them now!