A non-bank loan is a loan granted by an entity other than a bank. This is the basic difference that separates it from a traditional bank loan. Bank loans, as the name suggests, are granted only by banks, and their activity is specified in the Banking Law. Loans, in turn, are governed by the Civil Code and the Consumer Credit Act. It can be granted by banks and other entities that are natural or legal persons. The lender may be an institution and a natural person, but the money borrowed is not owned by third parties.
Costs of non-bank loans
In fact, non-bank loans bear higher costs than bank loans. However, they are very popular in our country due to the small amount of formalities, immediate access to the borrower’s funds as well as a quick decision to grant a loan. In addition, these are loans that do not have collateral and guarantors. These features translate into a definitely higher price for this type of loans on the market.
Minumum of formalities for borrowers
A small amount of formalities is the result of the fact that in the case of low loan amounts, the written form of the contract is not required and its implementation does not have to be carried out only in non-cash form. Thanks to this, the customer can record a given amount on the bank account in a relatively short time.
Non-bank loans are targeted especially at people who find themselves in a difficult financial situation and immediately need cash in a relatively small amount, the value of which does not exceed several hundred zlotys. The loan is repaid in such a case in a very short period. In the event of a crisis situation, it is a more effective form than getting a loan in a traditional institution.
One of the most important shortcomings of a non-bank loan is the high cost compared to the loans offered by banks. In the majority of cases, non-bank institutions do not check the situation of the borrower, so it is easier to get a loan. Therefore, they bear greater risk and therefore the interest rate is much higher than in banks. However, the borrower who decides on the low amounts of the obligation will not feel the high cost of such loans. A high interest rate usually refers to a low nominal interest amount.
What are the benefits of non-bank loans?
A non-banking loan is very beneficial especially when we need immediate cash and we are able to pay it back in a relatively short period of time. And although many people complain about it, it is still very popular in Poland.