Today’s entry will be devoted to Cash Loans. I will describe both the structure of the loan itself, its benefits and the process of obtaining. I will also present differences in current offers Good Credit cash loan offered by various Banks.
A step by step cash loan from Good Credit
According to the Banking Monitor published in April 2019 by the Polish Bank Association, they constitute as much as 72% of all credit products taken by Poles. Cash loans are therefore the most common way consumers finance their needs. Just behind them are:
- Mortgage loans with a result of 17%,
- debits and credit lines, which constitute 9% and
- credit cards with a score of 1%.
The Cash Loan, also known as the Consumer Loan , is a written contract that is concluded between the borrower (consumer) and the lender (Bank). This agreement obliges the lender to transfer / make available a specific amount of cash to the borrower with an indication of the specific time of their return. In turn, the borrower in accordance with the concluded contract is obliged to comply with the conditions set out in the Loan agreement and to return them within a specified period along with the commission and interest due.
Considering the criteria for loan distribution used in banks, we can distinguish Consumer Loans granted to natural persons and business entities (also known as Company Loans ) – granted primarily to business entities.
The purpose of the Cash Loan
Is to satisfy consumer needs, which, unlike Company Loans, is not used to generate revenues from operations, but only to the so-called direct use by consumers. Consumer Credit is most often financed for purchases of goods and services such as:
- home or apartment furnishings e.g. washing machines, refrigerators, TV sets, furniture,
- means of transport, mainly passenger cars,
- tourism, vacation, travel and renovation services,
- weddings, baptisms, special events,
- treatment, cosmetic procedures, aesthetic medicine.
As the recently published report of the Polish Bank Association shows, an average of USD 22,000 of debt falls on one adult Pole. This means that there has been a 3-fold increase in debt over the last decade. The dynamic development of the Consumer Credit market that has taken place over the last few years is inseparably connected with the increase in domestic trade and the emergence of many new possibilities of financing consumer needs.
We can distinguish 3 basic criteria by which types of Cash Loans are classified. These criteria are:
- form of repayment,
- type of security,
- method of granting credit.
Advantages of a Cash Loan
The undoubted advantage of the Cash Loan is that its purpose can be any. In practice, this means that the Bank does not expect the Customer to spend funds on a specific need and does not require documenting this fact. This is a great comfort compared to e.g. a Company Loan, for which the purpose of lending is usually clearly specified in the Loan Agreement. This obliges the borrower to document spending, e.g. in the form of invoices.
Another advantage of the Cash Loan is the fast pace of obtaining funds. Currently, there are many offers on the market that give you the opportunity to make a commitment in a very short time, during one meeting, and the funds are paid to your account immediately.
Another equally important advantage of Cash Loans is the fact that no matter what amount we want to borrow (as part of the bank’s offer), the bank does not expect us to have its own deposit, as is the case with Mortgage Loans .
The Consumer Credit offer at most banks does not assume the need to provide a third party surety and is not burdened with any additional collateral in the form of e.g. property collateral. Undoubtedly, this is another advantage of this form of financing.
Summarizing the advantages of a Cash Loan, the following should be mentioned:
- speed of processing and withdrawal of funds,
- no own contribution,
- any goal
- no guarantors,
- no “hard” security.
Good Credit Loan Cash Process
In the case of Cash Loans, due to their simple design and no need to verify collateral, the process of granting funds is simple and quick. Currently, many banks have an offer in which it should not take more than 24 hours from submitting an application to withdraw funds. Of course, with the assumption that the Customer at the time of submitting the application has all the documents and creditworthiness required by the Bank, and the process itself takes place systemically.
In practice, it looks like this:
- Submission of an application for a Cash Loan,
- Verification of the application by the Bank,
- Credit Decision,
- Signing the Cash Loan agreement,
- Withdrawal of funds to the customer’s account.
Cash Credit Ranking Good Credit
Currently, there are several dozen Cash Loan offers on the market. Each bank has an offer that differs in terms of basic parameters such as:
- minimum and maximum loan amount,
- borrower’s minimum and maximum age,
- repayment period,
- accepted sources of income,
- creditworthiness calculation method.
A customer with creditworthiness and a repayment history accepted by a given bank, i.e. correctly serviced liabilities indicated in the BIK report, may apply for financing at a given bank. However, the multitude of loan offers means that when submitting an application to a given bank, we are not sure that the given offer will be the best at the given moment for our needs and possibilities. Of course, we can indicate in the form of a ranking of cash loans those offers which are currently favorable, however, it should always be remembered that they are prepared on the basis of a representative example. In fact, the price offer for each customer may be different.