We deal with money at every step. We pay for purchases, plan home budgets and assess the status of our wallets on an ongoing basis. But does this everyday practice translate into real financial knowledge? Poles assess their financial competences quite high, but when asked about details, they do not understand the differences. This applies, for example, to credit and loans.
When we see bank advertisements, at first we are unlikely to pay attention to whether it is a loan or a loan. Interestingly, both concepts are often used interchangeably. Some banks say “loan” when it comes to credit. Why do they do that? Because it is generally believed that a loan is much easier to obtain and pay back, we associate it with something smaller and lighter. Although both credit and loan can help us finance our needs, there are differences between them that are worth remembering. Whether they are awarded to us is determined by many factors that are specific to a particular offer.Let’s calculate the costs exactly, if we have any doubts – then let’s ask the counselor in the branch or the helpline consultant.Before you decide on any of the financial solutions, each time it is worth reading its description.
Credit and loan: differences
Let’s try to indicate the most important differences between these products. First, only a bank can grant a loan. In the case of a loan – it can also be a non-bank company or even a natural person. As a rule, we take credit for a specific purpose. In turn, the borrower can issue a loan for any purpose, also related to running a business. So much theory. In fact, the bank will only ask you to pre-define the plan you want to finance with a loan, and in fact we will be able to use the loan for any purpose.Of course, there are loans with a predetermined purpose on the market, eg for renovation or buying a car.If we really have well-defined plans, it is worth looking for such offers, as they may have more favorable conditions (eg lower interest rates) than standard loan offers.
The other important difference between loans and credits is the legal basis to which they are subject. Loans are regulated by banking law, and loans are regulated by the Civil Code. What does this mean in practice? Each credit agreement is mandatory in writing, which gives both parties the comfort of clear rules and stable conditions. The invariability of the terms of the contract is very important because it gives you a sense of comfort and the ability to plan everything in your home budget. At Fine Bank, the interest rate on cash loans is fixed. Therefore, when you sign the contract, you always know how much you have to pay as part of the monthly installment.
The loan agreement should also be in writing, although there is an exception. If the loan reports to an amount of up to $ 500, there is no requirement to conclude a written contract. If we think about such a loan, then let us consider whether the verbal agreement fully protects us from various life situations.
Probably like a bank
As we have already mentioned, the terms loan and credit are very often used interchangeably by banks. Such a procedure is often only communication activities. When thinking about financing your plans, it’s worth focusing on the bank. A large and stable financial institution guarantees that the loan conditions will be met and it will not surprise us with anything. It is also high service standards. Let us also dispel fears regarding complicated procedures or long waiting times for money. Loans – even for small amounts – are easily available and can be obtained in as little as 15 minutes, including the necessary creditworthiness test.And the assessment of our credit options is not a “punishment” but a conversation between two partners,
Importantly, many credit products are granted on terms that are more favorable or comparable to loans. This can be seen on the example of cash loans at Agree Bank, which for many years has been helping to implement its clients’ plans, even from $ 500. For this you do not have to leave the house, because the whole process can be done by phone or the Internet. At Agree Bank, without a need to visit a branch, a new customer can receive up to $ 15,000, while a known customer, ie with credit history before, up to $ 25,000.
This is a loan for demanding customers that you won’t find in companies that only offer loans. It is characterized by much higher amounts proposed and a low interest rate. There is also a longer loan period, which guarantees an affordable installment, adapted to the possibilities.
Finance is a very important area of our lives
So it is worth knowing exactly the opportunities offered by individual financial solutions. The choice between a loan and a loan is an important decision that should be made coldly, after analyzing all the conditions and advantages of both solutions. It is also worth remembering that choosing the right form of financing our plans also affects the building of our credit history, which may prove to be very important – if not now in a few years, eg when buying an apartment.