What is a payday loan?
May 6, 2019
The concept of credit is basically reserved only for banking operations and it can be used in promotional and advertising materials by banks and cooperative savings and credit unions. However, in practice, we also hear about loans in relation to parabolic companies, which should not have the right to grant loans. However, they advertise short-term loans, i.e. quick cash loans as loans. Therefore, in the offers of these companies, we will find the term “payday loan”. How should you understand such a financial product and do banks also provide quick cash loans to their clients?
Bank loan is a concept reserved for banks
A loan is actually a contract to be made in writing, regardless of its amount. The parties to the contract are the bank or SKOK and the borrower who meets the conditions set for granting the loan. The Bank, under a loan agreement, undertakes to provide the client with a certain amount of money for a specified time and purpose. Therefore, the loan is a special obligation, although its purpose is not always pre-determined in the bank’s offer, the best example of which is a cash loan, which can be used in principle in any way. In turn, the borrower decides to sign a loan agreement with the bank and assumes the obligation to use the loan in accordance with its purpose and to return the amount obtained along with interest calculated at a fixed interest rate. It is also the responsibility of him to pay commissions and all other credit fees.
The speed of granting loans in banks and non-bank companies
Banks since the outbreak of the financial and economic crisis in the world are approaching in a more restrictive way to provide their clients with financial obligations. While it was possible to obtain a loan for the first time in a few minutes, with one visit at a bank branch, in the following years, according to the recommendation of the Polish Financial Supervision Authority, the banks had to scrupulously examine the creditworthiness and credibility of the client by controlling its financial situation at the Information Bureau credit. Currently, the banks’ lending policy has been slightly liberalized, and regular clients of banks with a positive history of cooperation may use simplified lending rules, thanks to which the credit process itself has been shortened. However, it is difficult to set the liabilities given by banks as a payday loan. “Waitors” as before, remain rather the domain of non-banking companies that are not subject to banking supervision and do not have to fulfill the conditions indicated in the recommendations of the Polish Financial Supervision Authority. They provide financing to their clients only on the basis of the Civil Code and the provisions of the anti-usury law.
What should be understood by the term payback loan?
A payday loan may mislead consumers because it is called a loan, and so in the same way as a banking product. However, such a financial product is granted only by parabank companies and it is a payday loan. Its determination is related to the speed of financial commitment to the client. A payday loan can be credited to the bank account indicated by the client at the stage of applying for money in a loan company, even within a dozen or so minutes, thanks to the automated process of checking the financial credibility of the client.