Customers using basic financial products and not exploring the differences between them often confuse the concept of a cash loan with a non-bank loan, treating these terms as identical. However, it turns out that the cash loan and non-bank loan – contrary to appearances – differ from each other. In this article, we explain the concepts and indicate the characteristics of the financial products in question.
Non-bank loan and cash loan – indication of the purpose of the loan
The non-bank loan is, in principle, granted for any purpose chosen by the client. This means that the borrower can take out a quick loan without having to declare what it will be used for. A quick loan to your account is not associated with any legal provisions that oblige the customer to provide information on the purpose of using the allocated funds. In other words, the loan company has no right to control how the borrower is spending money. In the case of a cash loan, the situation is quite different. It is worth noting that just a few years ago, already at the first meeting with a financial advisor or guardian in a given branch of the bank, a person who wished to take a cash loan was asked to clearly and very precisely indicate the purpose of this loan. Currently – after the change in the provisions of the banking law – persons deciding to take out a cash loan in the bank are no longer obliged to state the purpose for which these funds will be allocated (especially if the amount of the obligation is not too high and is burdened with many installments or the obligation to have required financial security).
Subject matter and parties to the contract
The main difference in understanding cash loans and non-bank loans are the parties and the subject of the contract. Cash loan is the domain of two institutions operating in Poland – banks and cooperative savings and credit unions. They are under the strict supervision of the Polish Financial Supervision Authority (KNF) and without its consent, they cannot sell clients any financial products, and especially not grant loans, regardless of their type and amount.
A non-bank loan can be obtained from both a loan company and another financial institution, which is referred to as non-bank loan. This means that this entity does not operate under the principles of banking law, but under the Civil Code.
Quick loans are also popular services that are provided by private individuals and investors involved in this type of business. The above-mentioned financial products are also offered by companies entered in the PFSA register.
It should be remembered that non-bank loan companies are not controlled by the Polish Financial Supervision Authority in a continuous and detailed manner. This means that every customer using a non-bank loan in a company or institution of their choice should carefully check whether it is a trustworthy entity. To this end, you should read the opinions of other clients, as well as review the alerts of the commission, in which an annotation may appear regarding suspected irregularities related to their business.
This knowledge is able to protect the client against unfair practices used in some loan companies, consisting in so-called usury interest or paying off debt on terms incomprehensible to the borrower. It is worth remembering that all non-bank loans, including payday loans in 15 minutes, are essentially loans and not cash loans. They have no specific purpose and are not subject to the Banking Act.
Legal bases regulating cash loans and non-bank loans
The provisions on non-bank loans, including quick loans over the internet, are governed by the Civil Code. Its provision stipulates that interest in the maximum amount may not, over one year, exceed four times the lombard rate. This rate was determined by the National Bank of Poland from above. Unfortunately, this regulation does not always work for some financial products offered by unproven loan companies.
A quick loan to your account should have clearly defined rules for repayment of the debt, including the final interest note, installments and any additional charges – so-called indirect costs. As for the cash loan, it is regulated by the Civil Code, the Consumer Credit Act, the provisions of the amended Banking Law, as well as other legal acts that have a direct reference to a specific type of loan. In addition, cash loans taken out at the bank are regulated by the provisions regarding maximum fees and commissions, the possibility of withdrawing from the contract, as well as the need to inform the customer about key product parameters, including the actual annual APRC rate and the obligations incumbent on him to use this forms of financial support. Quick loans, although regulated only on the basis of the Civil Code, are considered a legal and legally established financial product that can support many customer groups. This means that all loan companies offering this type of financial products, in principle, operate in Poland in a lawful manner.
Requirements for cash loans and non-bank loans
When analyzing the issue of non-bank loans and cash loans, it is worth noting that these products have basic differences that may directly affect the person of the borrower (the borrower), i.e. the customer deciding on this type of financial support.
A quick account loan is a flexible and widely available product. It can be taken online, as well as at the headquarters of the loan company. Online loans in installments mean that the customer does not have to go through a lengthy credit procedure at the bank’s headquarters, and also submit the required documents, the number of which can be quite significant. Online cash means that a person should complete the application correctly, confirm their data (pass the verification process), as well as document their source of income. This type of procedure lasts a maximum of 30 minutes – especially if the non-bank loan is concluded outside the premises of the company providing this type of financial support. Online loans can have a short or extended repayment period, which means that the customer can choose convenient installments.
A quick loan is a widely available financial product with high granting power. Thanks to this, it enjoys great popularity among clients of all ages and with different material status. In the case of cash loans taken out at the bank’s headquarters, the situation does not look so interesting because when filling out the loan application, the person is asked to provide the required documents in which he is asked to indicate the source of income required by this institution. In addition, you must confirm the continuity of your employment and the duration of the employment relationship, including its length. Payday loans in 15 minutes, as opposed to cash loans, are a proverbial lifeboat for people who already have a debt or bad credit history and those registered in the KRD.
An online loan in 15 minutes provides excellent support for those clients who have been rejected by all banks and – operating under the Banking Act – financial institutions. It is worth mentioning that people with very low incomes, as well as persons employed under a civil law agreement or cooperation agreement, can easily apply for quick loans.