Non-bank loans are growing in popularity. However, there are still people who are unconvinced that this is a reasonable solution and that it may be cheaper than a bank loan. Surprisingly, this is possible because non-bank loans are based on civil law, not banking law. On the one hand, it is a great convenience for consumers, and on the other hand, it may raise doubts who is really lending us money and whether there are no hidden costs?
Loan and credit – how is it different?
As a rule, loans and advances are granted by banks and credit unions. On the other hand, parabanks can only grant loans. But naming is not the most important difference. Costs will be more important for consumers. Well, every loan must bear interest. There is no legal way to get around this, which is why you won’t get a loan for free at the bank. Secondly, each bank must thoroughly check the customer and assess credit risk. This means obligatory checking of the BIK and Banking Register databases, and often also the National Court Register. On the other hand, loan companies do not have such an obligation. We borrow money under a civil law agreement, which usually includes the one who borrows and from whom, the date of the loan, the date of repayment of the loan or the date when it is an installment loan and the amount of the loan granted and the amount to be refunded, if different. But it doesn’t have to. The loans do not have to bear interest. It is an agreement between two parties, so the parties themselves determine its terms. Loan companies do not have to verify potential customers as accurately as banks, but they do it for their own benefit to assess their financial risk.
Advantages of non-bank loans
The biggest advantage is the lack of costs. But not all loans are like that! Loan offers for free, without interest and other costs are mainly addressed to new clients of the company. However, after fulfilling the requirements, you can get a loan and pay exactly as much as you borrowed within the time limit. That is why many people who often take loans simply change their parabank loan so that they do not pay additional costs.
Another advantage is the speed of verification of the loan application. Parabanks advertise in verification 15 minutes and it is actually possible. In fact, everything depends on the verification method itself. The first stage is usually a verification deposit to the lender’s account in a low amount, for example USD 1. The real time of checking the data and issuing the decision therefore depends on the speed of registration of the transfer by the bank. At best, it will be immediately, at worst on the second business day. The second stage is checking data in databases, e.g. InfoMonitor. The response from the databases is usually sent on business days, so when submitting the application on a normal day in the company that checks the databases will certainly be considered quickly.
Anonymity is a rarely mentioned but important advantage of online loans that parabanks provide. Especially in small towns, it is well known who enters the bank and how they leave. In the case of non-bank loans, no one needs to know that we borrowed money, in what amount and from whom. It is simply not visible to the general public, and even the immediate family does not need to know about it if we do not want to talk about it.
Various sources of income are accepted
Which is another advantage of parabanks over banks. The latter accept employment contracts, mandate contracts and work of a permanent nature with a minimum of 6 months back documentation of such contracts or income from running our own business, if we run it for at least a year. Parabanks simply accept sources of stable income. And the income itself may be less than the statutory minimum wage – which will affect the amount of the loan, but not the mere fact of its refusal.
For online loans, you can also extend the repayment deadline. This is a preferred option because payday loans are usually repaid in one installment after 30 or 60 days. An extension of the repayment deadline is payable, but the bank does not even have a paid option to extend the installment payment deadline. Therefore, it can also be counted as an advantage in favor of non-bank loans.
It’s worth reading the reviews!
Parabanks are divided into those with great reviews, as well as those with worse ones, where companies are often accused of high interest rates and unpleasant in the debt collection department. However, it also happens that some companies have a very high rejection of loan applications despite the fact that they charge a fairly high verification fee.
Searching for non-bank loan offers, and especially reviewing rankings, you can also find reviews. For example, Livus has very good reviews and, above all, a lot of them. It is one of the largest loan companies in Poland at the moment, so it is not surprising the number of opinions. However, if another company that has an interesting offer does not have any opinions, it is better to hold back on the loan decision there, because you do not really know how it works. Companies that have opinions – even if they are bad – are better because we know from other borrowers exactly what to look for, how the loan process went or even what the real costs are.