It is widely known that the Polish non-bank loans sector currently practically does not resemble the analogous industry from the initial stages of its existence in the realities of the Polish market, which is from the nineties of the last century.
Short-term payday loans for small amounts of money
Almost everything has changed: from the security of using non-bank loans to the attractiveness of the available offer and the degree of its diversity. Today’s non-bank loans are not only traditional payday loans, i.e. short-term loans for small amounts of money, but also many other loan products, to mention here long-term installment loans, secured loans or even more and more popular loan lines. Also, the legal status of lending institutions has been precisely regulated by the introduced provisions, including the Consumer Credit Act.
However, despite all of the facts mentioned above, many consumers are still afraid to use the offer of loan companies either for the sake of their own safety or as a result of the belief that the services of loan companies are extremely unfavorable for clients in financial terms, i.e. in aspects such as for example the interest rate or the overall cost of the loan.
Is this approach the right one or is it rather due to a lack of accurate knowledge about the modern loan sector? Let’s take a closer look at this issue and try to answer this question.
Security in using loan companies
We often hear about various types of scandals involving various types of non-bank loans. This fact is probably the main factor that raises concerns among customers. It is worth remembering, however, that there is a significant difference between loan institutions and so-called parabanks, which often also grant loans.
In the first case, the customer is dealing with reliable entities, operating in accordance with the Consumer Credit Act and being subject to control by the Polish Financial Supervision Authority. The latter are, in turn, entities belonging to the so-called gray zone, i.e. companies granting loans by bypassing the provisions of Polish law.
So we can easily guarantee the security of using solutions such as payday loans or other forms of non-bank loans: it is enough to check whether the given entity has the formal status of a loan institution.
Another important question, namely: are loans from loan companies profitable? Contrary to stereotypes, the basic interest rate on non-bank loans is very often only slightly higher than for loans offered by banks. In addition, loan companies do not require the customer to take out credit insurance, for example, which is a common practice used by banks and which obviously significantly increases the overall cost of the loan.
Customers of loan companies can also count on various bonuses and promotions, which in the case of a bank offer simply do not occur. I am talking here, among other things, about the now almost standard possibility of taking the first loan in a given company “for free” (without having to repay interest) or almost equally popular discounts and promotions for regular customers who pay their liabilities on time.