Payday loan versus loan

If you want to take a loan or a payday loan, we have a lot of different solutions to choose from. Banks have prepared a rich credit offer for us. Loans that we can take in non-banking companies also deserve special attention.

We have to distinguish loans from payday loans

We have to distinguish loans from payday loans

Although both solutions involve borrowing money, but the difference is the creditor with whom we draw a loan.

The loan will not be granted to us by any non-bank company that does not have the right to perform banking activities. Therefore, credit is a concept reserved only for banks, and its definition is included in the Banking Act. When deciding on a loan, it must be concluded on the basis of a written loan agreement, which specifies the exact amount of the loan taken, the parties to the contract, as well as the interest rate and commission amount for the bank, as well as the loan repayment date. If we decide to take a loan, we must be aware that the purpose for which we want to allocate it is strictly defined by the lender. We must inform the bank about what we spend the money on, and then whether we have fulfilled the contract.

Loan

Loan

As for the loan, it is a much broader concept and it can be granted by a non-banking institution, i.e. both a loan company and a natural person. The money we receive by taking a loan can be used for any purpose, we can do everything with them and we do not have to inform the lender about what we plan to do with the money. If we decide to borrow a small amount, we do not need to draw up a written contract, but if we borrow a larger amount, it is necessary to write a contract.

The biggest advantage of non-bank loans is the short repayment period and the speed of granting.

Payday loan

Payday loan

The payday loan is granted for a maximum of several weeks and the repayment period is usually 30 days, however, there are also loans with a 60 or 90 day repayment. Comparing these periods with a bank loan, it is definitely short. We can receive instant payments even in 15 minutes, it is not comparable to a bank loan where we have to go through the entire loan process. The final decision on granting a bank loan can be obtained even after a few weeks. In the case of payday loans, the process itself and the transfer of money to our account may take less than several minutes. Such action is certainly a huge advantage of non-bank companies. So if we care about time, the best option is to use payday loans in a non-banking company.