When you face the necessity of incurring unexpected expenses with no savings on your personal account, you will most likely be forced to take out a cash loan. This is probably the most popular form of obtaining additional cash. Banks eagerly provide them, and Poles are eager to go beyond the $ 600 billion barrier of total debt. There is no indication that the upward trend should stop. Important from the point of view of our portfolio is not to use the first better offer on the market, but to choose the best loan available at the moment. However, before we start searching, we need to know what cash loan really is.
Types of loans
Loans can be divided into several groups. This is obviously not a rigid division and can be modified slightly:
- Mortgage – This is a popular type of loan. It is taken to buy an apartment or a house or for another construction investment. They are usually granted for high amounts and for a long period of time. The name of the loan comes from the type of collateral which is mortgages established for the benefit of the bank granting the loan.
- Consumer loan – It is also called a cash loan. The borrower does not have to state the purpose for which he intends to allocate funds. The repayment period for such a loan is usually not long. In extreme cases it can reach 120 months. The repayment collateral is the borrower’s income, which must be documented when submitting the loan application.
- Consolidation loan – This is a special type of loan designed to pay off other loans. The principle of operation is very simple. It consists in combining all loans into one and paying off only one installment, often much lower than the sum of previous installments. This is a very good way to get out of the debt loop.
- Credit card – A financial product that allows us to reach a certain limit and if we repay the whole amount within the agreed time (usually 30 days), we will not have to pay any interest or commission.
How do you get a cash loan?
To receive a cash loan from the bank, we will only have to complete a loan application and await the decision of the analyst Mu Chumainngo. This decision depends on many factors. Mainly on our credit standing and on the history of BIK. The capacity will be calculated on the basis of what amount and from what source we receive remuneration. When we take away our current liabilities and household expenses, a bank analyst will be able to estimate whether we can repay another loan without any problems. Most likely, we will also be checked in the Credit Information Bureau database for past credit obligations. The ideal situation is when all old loans were repaid on time and we are employed on the basis of an employment contract. Then we have rather nothing to fear.
How much does the loan cost?
Cash loans are unfortunately not cheap. Of course, there is a gap between them, but they are not the cheapest in themselves. We always give the bank more than we borrowed. The amount of the fee depends on the current bank offer and, above all, the repayment length. The longer we repay the loan, the more it will cost us. Therefore, if possible, it is worth choosing the option with the shortest repayment time. The cost of the loan consists of its interest rate and commission. In total, it is usually around 20% per annum. Although we can easily find promotional offers at 10%, or vice versa up to 40%!
The most favorable loan – How to find it?
To find the best loan currently on the market, it’s worth taking a look at the internet. However, let’s not just rely on the websites of banks where each offer will be advertised as the best. It’s worth using independent expert blogs or even looking for information on online forums. Various loan comparison websites and calculators will also be extremely helpful, where we can easily compare the offers of all banks and we will be able to choose the most favorable ones. Thanks to calculations from such comparison websites, we will learn not only the installment amount for a given loan, but also its total cost and APRC value.
Payday loan as a replacement for a loan
When, for various reasons, we receive a negative decision on granting a loan in a bank, we can always try to submit an application to a loan company providing quick payday loans. Getting them is much easier than getting a loan. In most cases, we will not need to provide any certification. Unfortunately, in the case of installment loans we will be forced to pay back a little more overall than in the case of a bank loan.