Loans – hardly anyone likes this word, but most of us must use it. Cash loans are one of the most common forms of credit . This is not only the most common but also the most accessible form of granting loans.
Cash loans can be used for any purpose.
Among other things, because, as the name implies, they are paid in cash – in hand or as a transfer to a bank account.
Cash loans are most often used by people who have to finance home renovation, payment for a holiday or buying a car. Cash loans are characterized by relatively high availability – at least those whose value does not exceed PLN 10-15 thousand. The method of granting them is different in each bank and can be individually selected according to the profile of the client who applies for a cash loan.
If this is a person who has had a bank account for a long time and this account is regularly credited with money, a cash loan can be withdrawn even immediately, several minutes after submitting the online application in the online transaction system. However, in the case of fresh customers whose financial history is too short, the bank may ask you to provide some documents necessary to examine its credit history. These documents may include: income statement, a copy of the employment contract, as well as other documents explaining how to obtain income – for example, pensions from pensions.
Cash loans, depending on the offer, may have better or worse interest rates
Banks often also organize promotions in which they tempt with special offers for cash loans. They are granted on preferential terms, for example without charging a fee for processing an application or a commission for paying out a loan. Nevertheless, you should be vigilant and pay attention to what was written in a small print in the loan agreement. We may end up with an offer of a cash loan related to life insurance or inability to work. The cost of such insurance should be known thoroughly before we sign the loan agreement.
Let’s move on to a much more pleasant thing, i.e. discussing the expenses for which cash loans can be allocated. The good news is that there are no restrictions on the use of this money. Whatever you need it for, it can be used that way. Is it the purchase of everyday objects, or for renovation and housing, or adding a car. The money offered by cash loans is yours and can be consumed the way you like.
Once you know exactly where to apply for a cash loan, what documents may be needed for this and what to use the money for, the time comes to discuss matters related to repayment of the loan. Unfortunately, this is one of the less pleasant situations that we have to take into account when taking out loans or cash loans. Depending on the bank or company, a cash loan can be granted to us for a period of one year to even seven years. During this time, borrowed money can be repaid by us in one of two ways. In equal or decreasing installments.
Cash loans with equal installments are the most frequently chosen. Because they give us a clear picture of the expenses we will incur throughout its duration. An equal installment is one that does not change over the entire repayment period. For example, if the first installment of the loan costs you PLN 500, the last one will be exactly the same. It is a convenient solution, which, however, is not as financially advantageous as decreasing installments.
A cash loan with a decreasing installment is characterized by the fact that the first installment is the largest and each subsequent installment is gradually decreasing. The effect of this is that, for example, the first installment may amount to 700 zlotys and the last installment 400. In the end, cash loans with a decreasing installment are more advantageous and offer lower costs. This is due to the fact that we repay the interest part faster, thanks to which interest is calculated on a monthly basis from a lower amount. In the case of small loans up to several thousand zlotys, this is of little importance. However, when we intend to borrow larger amounts, the difference between a loan with equal and decreasing installments can be very large. To decide which form of credit will be better for us, it is worth conducting a simulation for each option. More and more banks allow it to be implemented, offering us online calculators. They are also available in our rankings, along with many other very valuable information about cash loan offers.
Automatic repayment will be a convenient way to pay off your cash loan directly from your personal account at your bank. Many banks offer this service as standard, automatically launched for every loan. How does it work On the day of repayment, you do not have to make a transfer to a specific account. Instead, the bank will automatically collect the payment from your account, provided that it has funds available.
What happens if the account is out of money?
Then you will be informed about it by a special message displayed in the transaction system, by e-mail or SMS sent to your mobile phone. You should always make sure that you have sufficient funds on your account, as this avoids accruing penalty interest. You can also set up a permanent direct debit. It works on the same principle as automatic repayment, except that the payment can be made to an external bank. The solution is very helpful when you do not want to open a new personal account with a cash loan. The direct debit is launched free of charge and can be canceled or changed at any time.
The last form is manual repayment. It involves sending the transfer to the crediting bank on your own, in the amount indicated in the schedule. This solution is also convenient, thanks to the existence of online banking, but requires remembering the dates on which the repayment should be made. Otherwise, penalty interest will be charged to our account.