Credit and loan, differences you need to know

People who want to get money from a source other than work are very hard to choose a loan or credit. These are the two most popular forms of getting new money that can be used for different purposes. These passwords are known to almost everyone, but not everyone is able to clearly say what the differences are, as well as the pros and cons. This text will show a comparison of a loan and a loan , which will show how the two forms of financing differ.

Loan and credit – differences

Loan and credit - differences

1. Who can grant a loan or credit

Polish law clearly states that the loan can be granted only by the bank and there are no exceptions to this. However, the loan can be granted by a financial institution or even a private person.

2. Appropriation of funds

People who decide to take out a loan must reckon with the fact that they will have to clearly define the purpose of the money. If they fail to do so, they may be refused a loan. In terms of the loan, there is no obligation to inform the lender of the purpose for which the money is to be allocated.

3. Legal regulations

The entire procedure related to granting a loan is enshrined in banking law, so it is the most important document for lenders. The loan procedure is not in the banking law, but in the Civil Code.

4. Conclusion of contract

In the case of credit, the contract is very specific. It must have a repayment deadline, as well as the costs associated with taking the loan. In the case of loans under $ 500, no contract has to be signed.

5. Additional costs

Taking a loan always involves fees that you have to pay, such as commission and interest. Loans are often free and the borrower does not have to worry about additional costs.

6. Property

Taking a loan means that the money will not be the borrower’s property until it has been repaid. In the case of a loan, ownership immediately passes to the borrower and he can do whatever he wants.

Loan and credit – disadvantages

Loan and credit - disadvantages

The question that is very often asked by people who need money is ” loan and credit , what should you choose?” It’s hard to say clearly what will be better for people. Each of these forms of financing has its pros and cons. Loans are not regulated by banking law and very often have a high interest rate in the event of late payment. They are also often much smaller than loans. Loans are taken from banks that are socially trusted institutions, so nobody should deceive the customer there. However, to take a loan you must have adequate creditworthiness, and also describe exactly the purpose of taking extra money. A loan and a loan is a duel that cannot be resolved unanimously and each of these methods has its pros and cons. Both of these forms should be available on the market, because more and more people need extra cash and some will take advantage of the loan, while others will need a non-bank loan .