Cash loans – what is it?
Cash loans are cash payments made by the bank at the customer’s request. They are granted for any purpose, the bank does not check what the money is spent on, as is the case with other financial products, such as housing or car loans.
Cash loans are usually taken on small amounts compared to mortgages. For this reason, they are often called cash loans. They can be drawn up to a maximum of PLN 200,000.
Small cash loans do not require guarantors or additional collateral, they can be purchased even as evidence. However, when more money is involved, the potential borrower must submit a number of different documents confirming his financial capabilities.
Ranking of cash loans
Cash loans are worth comparing to choose the most advantageous offer for yourself. Each bank offers such financial products, and their offers may vary. It is worth using useful tools such as cash loan calculators or a cash loan comparison tool. All you need to do is enter the basic details such as the loan amount and the repayment period, so that you can review the cheapest cash loans after a while. Information on interest rates, APY, commission, total repayment amount and monthly installment will be displayed. By these parameters, you can also segregate the displayed results (from the smallest to the largest or vice versa). Thanks to such tools, it is easier to answer the question, in which bank it is worth taking a cash loan.
Cash loan – how to choose?
When choosing a cash loan you should pay attention to many issues. One of them is RRSO, which is the Actual Annual Interest Rate. It houses not only interest costs, but also additional fees charged by the bank. The APY simulation can be calculated in some cash loan calculators. Before signing the contract, each bank should inform the borrower about the APRC.
The loan costs usually also include insurance. They may vary depending on the bank. They are not obligatory, but they can often lower the interest rate or commission. Such insurance is mainly aimed at securing the bank for various unforeseen events, such as repayment in the event of death, disability or incapacity for the borrower. Some insurance is further extended in favor of the person taking the loan. There are additional unforeseen events such as job loss or temporary inability to work.
Cash loan and types of installments
When choosing a cash loan, the type of installments is also important. Equal rates are even more popular, which are the same for the entire repayment period. In its amount, only the proportions are volatile, initially the borrower pays back the major interest part, and the smaller the capital one, as time passes, it will change.
Declining installments, however, are characterized by higher repayment amounts at the very beginning of the loan period, but later they are lower. Variables are also proportions, the greater part of the capital is then repaid, then the interest is repaid.
Declining installments are more favorable, but not in every case. They can reduce the creditworthiness, because the initial installments, ie the highest ones, are taken into account. Better creditworthiness will be when choosing equal installments.
Declining installments are recommended for people who take out a loan at a mature age. It is worth bearing in mind that if the retirement benefit becomes the main source of income, the liabilities to be repaid would be as low as possible.
What documents are needed to obtain a cash loan?
In order to receive a cash loan at the bank it will be necessary to present such documents as an ID card and a certificate of received income. Information about employment (in the case of a contract of employment) and the amount of remuneration is indispensable. On the other hand, pensioners must provide a photocopy of the document granting the benefit and the episode of the last payment. More formalities are waiting for people who run a business and want to take a cash loan. They must attach to the application such documents as a certificate of non-payment of ZUS and US payments, confirmation of received revenues, as well as company registration documents.
Cash loan without certificates
Cash loans without certificates are usually taken for small amounts, they can amount up to a maximum of PLN 50,000. Banks do not grant loans without checking the information contained in Retrodatabase, ie at the Credit Information Bureau. Financial institutions analyze the credit history and assess whether the person is credible in financial terms and whether he will be able to pay off his obligations. If the borrower had problems with timely repayment of loans in the past, his application may be rejected.
Cash or mortgage loan?
Mortgage loans can be made for higher amounts and for a longer loan period. They are also purposeful, so they can not be used for various products, as in the case of cash loans. The purpose of the loan must be clearly defined, the money can be used, for example, to build a house or renovate a flat. All expenses must be documented. Cash loans, however, are characterized by greater freedom. You do not have to prove to the bank what the funds have been allocated for. The loan is also much faster. However, it is associated with a higher interest rate than in the case of mortgage loans, because the bank must adequately protect itself.
Car loan or cash?
Many people who want to buy a new car wonder if it will be better to pay cash or car loans. The latter will be more beneficial due to the lower interest rate. However, one must take into account that the bank requires a number of collateral, such as a registered pledge or assignment of an AC policy. Until the loan is repaid, this institution will be the owner of the car.
However, car loans are targeted and can only be used to purchase a vehicle. When it comes to used cars, not every bank wants to provide such loans, there may be restrictions on the age of the car. There are no such problems in the case of cash loans, which can be used for any purpose.