The terms “non-bank loan” and “bank loan” are often used interchangeably. Meanwhile, the list of differences between them is very long. Do you need additional funds and wonder which product to apply for? We have prepared a guide in which we explain the differences between non-bank loans and bank loans.
Internet loans and credit – legal regulations
On the formal side, the difference between loans and bank loans comes down to legal regulations. Internet loans offered by loan companies are granted on the basis of the Civil Code. The granting of payday loans and non-bank loans is also regulated by the Consumer Credit Act and the Act on Financial Market Supervision and certain other acts (the so-called anti-usury act).
Banks operate on the basis of the Banking Act , according to which the granting of loans is an activity reserved exclusively for them and credit unions. The banks’ offers include various loans, including: cash, mortgage and consolidation loans.
/ “By the loan agreement, the lender undertakes to transfer to the person taking the property a certain amount of money or items marked only as to the species, and the recipient undertakes to return the same amount of money or the same amount of items of the same grade and quality.” /
_________ – Article 720 § 1 Civil Code
/ “By the loan agreement, the bank undertakes to make available to the borrower for the period of time specified in the agreement the amount of cash for the specified purpose, and the borrower undertakes to use it under the conditions set out in the agreement, return the amount of the loan used together with interest on the specified dates repayment and payment of commission on the loan granted. “/
_________ – Art. 69 § 1 Banking Law
Who grants loans and who grants loans?
A non-bank loan is a characteristic product of loan companies. Contemporary lenders on the Polish market offer both online loans in 15 minutes (often referred to as “payday loans”) and online loans in installments. Characteristic for the latter is that the client gives money not once, but in monthly installments. However, anyone who has capital can take out loans – it can be both a company operating as a company or an individual.
While everyone can offer online installment loans, the case is different with loans. Only banks are authorized to grant them. In addition, loans are granted under strict conditions which have been specified in the Banking Act.
Form of the loan and credit agreement
Online loans in 15 minutes offered by loan companies are granted online. As a rule, the lender does not have to write a contract with the client, provided that the subject of the loan is up to USD 500. In other cases, a contract must be drawn up. Its content should indicate both the costs and the repayment date.
The loan agreement must be in writing. The Banking Act (Article 69 paragraph 2) contains detailed information on what elements should be included in the loan agreement. In particular, it must specify: the parties to the contract, the amount and currency of the loan, the purpose for which the funds will be allocated, as well as the amount of costs and the repayment date.
Online loan and credit – costs
The difference between loans and credits is also visible in the costs incurred by the customer using these products. Loans can be granted free of charge. Loan companies are very eager to use this option. An online loan for USD 0 is a form of promotion addressed to new clients.
Still other loan companies, such as the Right company, are introducing a symbolic fee – customers taking loans online in the amount of USD 1,500 for 60 days must expect a fee of USD 10 (APR 4.12%).
Some lending companies offer online loans in installments , i.e. loans whose repayment – as the name suggests – takes place in monthly installments. The above-mentioned Right company offers its clients USD 20,000 for a maximum period of 60 months.
Taking a loan always involves additional costs for the client. This is clearly seen in the example. By borrowing USD 20,000 for a period of 36 months, the client will pay USD 664.74 per month. The total cost of the loan will be USD 23,930.64. It consists of an interest rate of 4.4 percent. and commission for granting a loan in the amount of USD 2,380.00.