Which loan should I get for a specific purpose? You do not know what a mortgage or a mortgage loan can be used for? What is the difference between a cash loan and a cash loan? Details below.
The most popular loans in banks . Banks offer many different loans, some of them are more popular, others less. At other times, there is a need for a cash loan, and another mortgage is used. However, before the bank decides to grant a loan, it must examine its creditworthiness exactly. Very often at the beginning it is a preliminary assessment, eg after calling the customer by phone, then a proper assessment of its creditworthiness and creditworthiness is carried out based on the application submitted and checked at BIK.
A short guide, where and for what loan or loan in the bank.
The assessment of creditworthiness consists in checking by the bank whether the consumer will be able to timely pay the debt along with interest and other fees. When calculating the capacity, the bank takes into account the monthly income, expenses (fees, maintenance costs, other loans, including debits on the cat and credit cards). The next step is to check the creditworthiness, that is, the bank will check us in BIK. In the Credit Information Bureau, banks (as well as SKOKi) check the credit history.
If it is positive, then we can count on getting a loan from the bank. Our credit rating and creditworthiness affect our assessment by the bank. With less capacity, but positive history, the bank will certainly offer you a smaller loan. If we have creditworthiness, but a negative credit history, we will not get a loan with a high probability.
We can distinguish several loans that can be found in banks. And virtually every one of them has a different application and other security for its repayment.
Mortgage loan (home loan)
Is granted for the purchase of real estate , usually it is buying a flat or a house. The loan is secured by a mortgage established on the property. If you buy a flat, a mortgage is often called a housing loan.
The value of the property being credited is much higher than the monthly income of the borrower, therefore mortgage loans are granted for a very long period of time, even up to 35 years.
The Polish Financial Supervision Authority has strengthened the principle of granting mortgage loans in Recommendation S. They also suggested a change in the banks’ approach in terms of the mortgage loan term: the bank should recommend retail repayment period for loans no longer than 25 years. In the event that the client wants to pay off the loan longer, the repayment period may not exceed 35 years.
With a mortgage loan, banks also require a borrower’s own contribution, which in 2016 amounted to 15%, and in the current 2019 it is already 20%. The amount of own contribution also depends on additional loan security.
A mortgage loan is similar to a loan in the form of a security, because like a mortgage loan, the mortgage established on the real estate is a security. In the case of mortgage loans, it is a property belonging to the debtor or a third party.
A mortgage loan may be used, unlike a mortgage for any purpose , and its amount depends on the value of the pledged real estate.
Granted to finance the purchase of movable property , usually a car. Movement is also a security for the loan. The collateral takes the form of a registered pledge or transfer of ownership. What does a registered pledge or transferation mean? Until full repayment of the loan, the owner of the vehicle is not the person who bought the car, but the owner is the bank.
The time for which a car loan is granted is usually from 1 to 5 years, but you can also find car loans with a loan term of up to 10 years.
Cash loan or cash loan
The cash loan must be intended for the purpose stated in the contract . On the other hand, a cash loan can be used for a purpose according to your own needs .
In the case of a loan or a cash loan for a larger amount, the bank usually requires security in the form of a bill of exchange or a third party guarantee. This cash loan is known as a cash loan with a mortgage . Currently, the maximum amount of cash loan granted by banks is approx. PLN 150-200 thousand. zł.
Borrowing smaller amounts, the bank can give us a cash loan for a statement or a certificate of earnings.
The repayment of a loan or cash loan is usually from 3 months to 10 years. However, most of the cash loan offers are the maximum repayment period of 7-8 years.
It is usually known as debit ( debit limit ) in a bank account. Nominal interest rate is usually higher than with cash loans. The loan amount is usually at a level not exceeding 3 times the monthly income on the account. It is triggered when the funds on the account run out and interest is calculated only on the amount used. Any impact on the account reduces debt.
The credit limit is also provided in the credit card . A non-cash payment is made with a credit card up to the amount of the granted limit. The card due to the so-called the interest-free period allows you to borrow without having to pay interest. The condition is one: the debt must be repaid in a timely manner – otherwise, the bank will charge us interest.
As mentioned above, credit cards are used for non-cash payments. When using a credit card to withdraw money from an ATM, there is no interest-free period. Thus, the interest will be charged from the day the cash is withdrawn from the ATM.