Through 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 specified in the agreement, return the amount of the loan used together with interest on the specified repayment dates and payment of commission on the loan granted.
How does a loan work?
Through a loan agreement, the loan provider undertakes to transfer to the property of the recipient 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.
WHO CAN GIVE A LOAN?
Credit can only be granted to us by the bank or credit unions. It is the act that determines who can grant us credit and in what form.
It is worth knowing that a bank or credit unions grant a loan, not from its own money. This means that the bank does not own the money it lends. Money in the bank is really their clients’ money entrusted to them in various forms. In the case of Lender, this is the money of their members.
WHO CAN LEND?
Anyone who has the capacity to perform legal acts, i.e. the ability to acquire rights and obligations in civil law relations, can grant us a loan.
Therefore, a loan can be granted to us by a bank or credit union. However, in this case, there are also other entities such as loan companies or even natural persons. Just like banks do not grant credit with their own money, the condition for a business entity to grant a loan is the obligation to have their own money.
WHERE MONEY FROM – LOAN
As mentioned above, in the case of the bank, the money comes from the bank’s customers. In the case of Lender, this is money from their members.
WHERE MONEY FROM – A LOAN
A natural person or business entity that wants to grant loans is required to have its own money. This means that to borrow money to someone else, he must own it.
IS IT EASY TO TAKE A LOAN?
The bank makes the granting of the loan depends on the borrower’s creditworthiness. Creditworthiness means the ability to repay a loan taken out with interest on the dates specified in the contract. The borrower is obliged to submit, at the bank’s request, the documents and information necessary to assess this ability.
If the bank assesses that the potential borrower has too low income and will not be able to repay the loan installments, he must reject the loan application. Creditworthiness is verified in the Credit Information Bureau. This verification is necessary during the credit process. What’s more, only a positive creditworthiness assessment will allow the bank to grant us a loan.
IS IT EASY TO TAKE A LOAN?
In the event that the bank refuses, after assessing the creditworthiness of the potential borrower, to grant a loan, a majority of people go to institutions outside the bank for money. A non-bank business entity is not required to verify the customer at the Credit Information Bureau. Hence, flooding ads that promise money without prior verification even for people with low earnings.
Nominal interest rate, i.e. the amount of interest on the loan. Shows the interest rate charged on the loan capital.
Reference rate – the interest rate which serves as the basis for determining the interest rate on the loan, referring to the minimum interest rate on basic open market operations conducted by the National Bank of Poland .
The reference rate is 1.5%.
The pawnshop rate is 2.5%.
The maximum interest rate on a loan or credit maybe 4 times the Lombard rate.
Non-interest loan costs – all costs that the consumer incurs in connection with the consumer loan agreement, excluding interest.
APRC or real annual interest rate. It is the total cost of credit for the consumer, expressed as a percentage of the total loan amount per annum.
Total cost of credit – all costs that the consumer is obliged to incur in connection with the credit agreement, in particular: a) interest, fees, commissions, taxes, and margins if known to the creditor, and b) costs of additional services, in particular, insurance, in the case of when their incurring is necessary to obtain a loan or to obtain it on the offered terms.
Interest on loan capital cannot currently amount to more than 10%. It should be remembered, however, that in addition to interest on capital, which may not exceed 4 times the Lombard rate, the cost of the loan also includes additional costs that jointly affect the APRC.
Nominal interest rates remain the same as for loans. However, when granting loans, non-banking institutions impose much larger amounts of additional costs, which in turn lead to the APRC being much larger than loans