Credit or loan? It’s worth knowing the difference.
Loan is a banking term, so the loan application procedure is carried out under banking law. The loan agreement, under pain of nullity, must be made in writing and contain basic information regarding the amount of the loan, repayment rules and dates, interest rate and allocation of funds. The consumer loan is specifically regulated, which means any loan taken by a civilian for any purpose. The essence, rights and obligations of the parties concluding a consumer credit agreement are even regulated by a separate Act of 12 May 2011 on consumer credit. – Pursuant to this Act, the signing of each contract should be accompanied by completing an information form, in which the details of the institution granting the loan and borrower, loan amount, interest rate, installment amount, total cost and final repayment date are exchanged. In addition, information is provided about additional fees and commissions, as well as how to secure the loan. The legal regulation of consumer credit is in the interest of the client by guaranteeing him access to relevant, reliable and clearly presented information regarding the financial liability incurred. – explains Paweł Kosmala, president of the board of the Upper Silesian Finance Society. Importantly, the borrower has the right to withdraw from the loan agreement within 14 days, as well as repay the loan ahead of time.
The lending institutions freely set requirements for potential borrowers.
The loan, as opposed to the loan, is regulated by the provisions of the Civil Code. A party to the agreement may be a bank, but also a company and a civilian. The loan agreement may be concluded in any form, even orally, but it has been accepted that for amounts over PLN 500 a relevant document should be drawn up. Consequently, the lending institutions freely set requirements for potential borrowers. Therefore, the standard is that the customer is not obliged to present the purpose for which he wants to allocate funds or document his creditworthiness. The necessary funds are usually granted on the basis of the ID card presented.
Cancellation of a contract
We should remember, however, that the high risk of paying the loan together with the commission the lender compensates with high interest rate and a relatively short repayment period. In the event of cancellation of a contract or a conflict of parties, we are not protected by banking law, and therefore we will have to sue ourselves in court.
It has been accepted that taking a cash loan is safer. The rules are clearer, the borrower is more protected, and even banks do not grant credit to a person without creditworthiness. However, there are situations when we need urgent cash and we do not have time to visit banks and complete a lot of formalities. Then the cash loan, which we can receive within 15 minutes, becomes the perfect solution.