Looking for additional funds to the home budget, we can often encounter ads offering free payday loans, loans without BIK or loans for 18 years? We are perfectly aware that there is nothing free in life. Why, then, would someone borrow us for free money without even verifying our ability to repay them? What do companies offering non-bank installment loans benefit from this type of promotion? Below we will dispel some doubts and explain what really goes in free intervals!
Direct payday loans only: Payday cash is deposited directly to your account
The first ads praising free payday loans appeared in Poland only a few years ago – while the market for non-bank installment loans and later loans over the internet has been developing for at least a dozen or so years. Where did you get the idea for free payday loans, what do loan companies have? Everything depends on the right company marketing. Enterprises, primarily those operating in the service area, do not focus on the price, but on the quality of their services and building relationships with the client.
The most difficult element in the development of a company is not to keep the client – but to acquire him. Therefore, often, to the dissatisfaction of regular borrowers, people who first try to get financing to get a much cheaper and sometimes even free offer from the company. The company thus gains a new customer who will return to the company on the occasion of another need to get money. Thanks to which the contribution contributed to its acquisition will pay back with interest. Therefore, if you are looking for direct payday loans, it is good to click here for more.
Where did the loan companies come from?
For starters, we need to explain how companies that offer non – bank installment loans earn. For this purpose, it is worth moving back several centuries back. Until the 19th century, the banking services market was flexible and unregulated by law. This meant that banking was available to practically everyone who had adequate capital, knowledge and, of course, knowledge. Banks dealt with both settlements as well as lending, trading and currency exchange, as well as investing in real estate, shopping trips, and even political campaigns and wars (including domestic ones).
Later, during the Napoleonic period, it was decided to regulate the subject of activity while granting banks a monopoly on granting loans. The following years brought changes and further regulation of the banking sector, which broadened the monopoly of banks while limiting the possibility of entering the market for new entities. Currently, in Poland, the right to granting loans is held by banks and cooperative savings and credit unions. To set up a bank, besides a number of permits, it is necessary to have at least EUR 5 million in the capital, less restrictive requirements apply to cooperative savings and credit unions, however, only certain members of the cooperative can apply for financing on relatively favorable terms.
Loan market in Poland
High barriers to entering the banking market and formalities imposed on banks cause that the costs of loans remain high, and the possibilities of applying for them are limited due to the compulsory security of banks in terms of capital adequacy and risk management. This means that the state and shareholders require the bank to tighten up the procedures related to granting loans that will secure its solvency. What is more, the law requires that the loan be so-called purposeful financing, so when applying for it, you need to determine the purpose of its destination in advance, which limits the possibility of using it to quickly replenish your current home budget.
All these factors have resulted in the fact that many consumers who need additional funds are opting for non-bank loans, which, unlike loans, are not covered by the banking law and civil law. Therefore, anyone can give it, and the formalities are small. Therefore, the thesis confirms that, in order to go forward, it is sometimes necessary to go back – even by several hundred years.
Non-bank installment loans – how does it work?
It has been known for a long time that the most you can earn on trade, so even more income can be derived from borrowing money for trade. The scheme of loan companies differs from the bank. Banks grant loans using funds accumulated on their clients’ bank accounts and funds deposited on deposits. The income for the bank is, therefore, the difference between interest rates and commissions on the loan granted, and interest on deposits.
Loan companies are not able to deposit their clients’ savings. Therefore, they only use their capital or money borrowed from other sources to grant loans. It is worth emphasizing that loan companies operating on a large scale have the opportunity to obtain much cheaper capital. By which they can later borrow it to their clients, not necessarily imposing high margins on it. So if companies offering non – bank installment loans often have to pay for money, how did they get the idea for free payday loans?
Is a free moment always free?
Another thing to look at is whether free weekends are completely free and what “stars” on offer can look like. Non-bank installment loans have several types of costs. These include interest expenses and commissions, as well as non-interest expenses and contractual penalties for non-compliance with the terms of the contract. All types of costs related to loans are limited by law, however, they can significantly differ between companies and various types of loans. Free payday, so it can be free in part or in whole. This means that a person taking out such a loan may not pay eg interest costs and commissions.
However, it is not exempt from non-interest expenses. The second type of free payday may be based on the assumption that you borrow and give the same amount. Provided that you give it back on time. No company offering non-bank loans can afford that its clients will not pay their debts on time. This is all the more important because they are usually loans without BIK or loans from 18 years, so the lender does not verify the lending capacity earlier. So when concluding a free payday contract, we should check two very important things. The first is whether the contract contains no additional fees other than interest. And the second is the deadlines in which we should return the money and what we are threatened with if we do not return them within the required time.