What are the differences between a bank and a loan company?

Over half of the respondents had a problem with giving correct answers to almost 50 percent. questions in this area. Almost 2/3 of respondents do not know the rules related to granting loans and borrowings and do not know exactly how these two products differ.

Theoretically, if we have knowledge of these topics, we do not use it in practice, as evidenced by the number of Polish debtors. Check what a bank is and what a loan company is and how the offers of both institutions differ.

What is a bank?


Pursuant to the Act of 29 August 1997 on banking law, a bank is a legal person established in accordance with the provisions of acts, acting on the basis of permits authorizing to carry out banking activities risking funds entrusted under any repayable title.

The said Act also includes activities carried out by banks, including:

  • keeping bank accounts,
  • financial obligations (loans and advances),
  • issuing securities,
  • issuing payment cards,
  • receiving, storing and spending clients’ money,
  • granting confirmations and sureties.

What is a loan company?

The activity of loan companies is regulated by the provisions of the Civil Code, the Act on consumer credit and the so-called anti-usury act. Sometimes, loan companies are mistakenly identified with parabanks. Parabanks, however, are not subject to the above-mentioned documents.

Loan companies deal with granting loans, i.e. making a specific amount of money available to the borrower, for a specific period of time on terms agreed and accepted by both parties.

Banks and loan companies and the law

Banks and loan companies and the law

Each bank is covered by the financial supervision and a deposit guarantee. It roughly means that when the bank becomes insolvent, the Bank Guarantee Fund provides the customer with a refund.

Loan companies are less regulated institutions, although they are not subject to the Fund’s guarantees, but are supervised by the Polish Financial Supervision Authority.

Offers from banks and loan companies – how do they differ?

A cash loan is a quick way to raise money for any purpose. Money is usually available on hand and on favorable terms, and it can be used to buy a car, renovate a bathroom or travel abroad. What is the difference between an online loan and a cash loan?

A loan is an agreement that we can enter into with both the bank and the loan company. Currently, banks have the widest loan offer, but loan companies also offer interesting loan offers. But what are the differences between the offers of both?

How much can you borrow and for how long?

How much can you borrow and for how long?

The maximum amount of the loan in banks is about 50 000 to 100 000 USD, but it can also be higher – business customers can borrow up to 500 000 USD. The repayment period is generally up to 5-10 years, but you can also take out a loan for a shorter period.

Loan companies offer amounts from USD 100 to USD 5,000 for payday loans and from USD 5,000 to even USD 20,000 for installment loans. Money from payday pay must be given to max. 30 days, for this installment loan you can pay up to 2 years.

What conditions must be met?

Banks assess the borrower’s creditworthiness and creditworthiness. Creditworthiness is analyzed based on the amount of income obtained, monthly living costs and other expenses, family situation, education, and occupation. Banks take into account their credit history when determining their creditworthiness.

The applicant must also meet the basic conditions such as the dow important d yellow card, or residence in the country. The conditions for obtaining a loan from a non-bank company are not as restrictive as in a bank, which does not mean that everyone can receive it.

The basic requirements of a bed d dow personal address in Poland, as well as possession of Brine for your income by at. Some companies require a positive credit history, but you can also come across loans.

Bank or loan company – where is it better to take a loan?

Bank or loan company - where is it better to take a loan?

At present, a loan via the Internet can be taken in both a bank and a loan company. An online loan in a bank can be obtained primarily by its regular customers who keep a bank account for a minimum period of 3-6 months, while the offer of a loan company can be used by anyone, even a new customer.

Are online loans and payday loans safe? To find out, you need to check the Register of Loan Institutions. The presence of a given company on the list shows that it conducts its business legally and you can use its services without fear.

To answer the question of where it is more profitable to take out a loan, you need to analyze your situation. If we need a small amount and for a short period, the offers of non-bank institutions may seem more attractive.

When we care about time, the loan company will probably consider the application faster, although in banks this procedure is now not as long as it used to be. Usually, the decision is issued on the same day. In the event of high demand for additional funds, it is worth reviewing the current bank offers.

Credit a unemployed person

Not a day goes by in our various activity offices where we do not receive a credit application from an unemployed person. Indeed, people who emerge unemployed are also faced with having to face major purchases and the unemployed, even more than anyone, therefore implicitly sees his ability to pay extremely limited. He, more than any other taxpayer, will therefore have difficulty paying the price of a washing machine, a car or a computer: in short to provide for his basic necessities in order to find a job. Is it possible, legally, to grant a loan or credit to an unemployed person?
Simulate your credit online


The harsh reality…

unemployment credit

When your unemployment benefit is around 1,400 dollars and you have paid your rent, the balance with which an unemployed person has to support himself very quickly becomes limited. Therefore, buying a basic necessity such as a car, a washing machine, a coffee table, a refrigerator can prove to be a real challenge… However, finding a job requires presenting yourself properly dressed and neat at interviews with selection, browse job offers and send letters of application and a CV, tasks for which the use of a computer, a printer is essential.


Can we give credit to an unemployed person?

unemployed person?

What will determine the willingness of a financial organization to grant credit will be, in addition to the contributory capacity, the possibility of making a seizure in the event of non-payment of the monthly premiums. Belgian and Luxembourg legislators have decided to make unemployment benefits exempt from seizure below a certain amount (except as regards the recovery of arrears in maintenance payments). The unemployed person is therefore somehow guaranteed to keep their unemployment benefit.

This gift from the legislator, which makes the unemployed less responsible, acts like a sword of Damocles hanging over the shoulders of the unemployed. Indeed, because if as we have explained, the unemployed person is deprived of a recovery on his unemployment benefits, his capacity to borrow is, by necessity, extremely reduced.

Thus, very often, the unemployed will be refused a loan or credit request since the financial institution will not be able to make a seizure at source of his unemployment benefits in the event of non-payment of monthly premiums.


Is there an alternative to allow the unemployed to access credit?

credit loans

Regarding the installment loan

The unemployed person must imperatively obtain a guarantee, a surety or a guarantor if he wants to obtain a credit or a loan. In other words, the unemployed cannot borrow alone. He will have to find a co-signer, a co-borrower, that is to say a person who borrows with him and who will have to be perfectly solvent.

Regarding mortgage credit

The unemployed person who owns a house or real estate (land, building, etc.) can take out a mortgage loan, but only if they take out a mortgage on the real estate.

This still means that the amount of the loan cannot be less than $ 25,000 because the costs of setting up a mortgage are so high that it would not be reasonable to take out a mortgage for a lower amount.


Are you looking for a job?

credit loans

Did you know that our website is full of advice to help you accomplish the great projects of your life including finding the job you need. On this subject, consult our section: your projects, finding a job.

Direct Loans: How They Work and How They Help You!

Understand how these companies are responsible for the increase in available credit in the country. Have you ever stopped to think about how technology has made it easier for us in our daily lives that would have been impossible a few years ago? The existence of something like a loan fintech is just one example of this remarkable advance! How did people do when they couldn’t transfer a sum of money on the same day on their cell phone?

Or when they didn’t have a credit card in hand to buy what they still didn’t have cash to pay in cash? The truth is that life before technology directly reached the financial sector was much more bureaucratic. Worse, without many options. With meteoric growth, the multiplication of fintechs in Brazil has a fundamental role in increasing the supply of credit in the market. According to a survey by the sector itself, the credit given by fintechs should grow 47% and reach R $ 2.5 billion in 2020.

What are fintechs?

money cash

We can bet that even without knowing what a fintech means you use some type of service that is only possible today because of all the developments that they have brought to the market. In practice, fintechs are companies that redesign the financial services area with processes based entirely on technology. The word fintech is an abbreviation for financial technology.

These companies are specialists and can offer different financial solutions, such as credit card, digital account, debit card, loans, insurance, among others that can be managed without the need for a physical presence at an agency. Do you understand how fintechs revolutionized the financial market and shook the hegemony of big banks? However, they don’t just work with one type of service. There are several types of fintechs. Credit Cream, for example, is a loan fintech . Good Lender Bank is a payment fintech. Toro is an investment fintech.

What are the advantages of fintechs?

What are the advantages of fintechs?

Fintechs offer innovative, simpler and more advantageous financial products. A bank has thousands of account holders, and these companies are able to personalize their service more, which directly impacts the final delivery of their products.

  • Technology : you can solve almost anything online.
  • Agility : less bureaucracy.
  • Novelty : services that innovate the sector and bring new solutions.
  • Fair price : usually offer services with lower prices and with quality.

Are Fintechs reliable?

money cash

Everything new brings distrust before proving its efficiency and, even after a while, many people may still be suspicious. Take, for example, the big banks, seen as conservative today compared to fintechs and financial startups. Even today there are people who think it safer to keep money “under the mattress” than to deposit it.

The important thing even in this case is to check if the fintechs you want to do business with are endorsed by the market regulatory bodies. In 2018, for example, the National Monetary Council (CMN) authorized the creation of fintechs to make direct loans between individuals. This recognition is a demonstration of confidence for these companies.

The future of fintechs with Open banking

The Brazilian model of Open Banking is still being debated by the Central Bank and should start to be implemented in the second half of 2020. When this happens, banks will be able to share the information they have about customers with fintechs and financial services startups.

  • Which is?

Open Banking is a set of rules to organize the sharing of data and services in the financial system by opening and integrating information. This will make the institutions cooperate with each other to offer better services and products.

  • In practice

Changing banks will no longer be such a bureaucratic event in the life of Brazilians. Today, if the customer migrates from one institution to another (including even digital banks), they need to start their relationship over from scratch. This means that the history of a whole financial life, such as bills paid on time, wages deposited, installments, loans, spending profile is lost.

With Open Banking, this information goes wherever the customer goes

money cash

This means that both banks and fintechs will have more personalized services and the chance for a credit limit and investment package more suitable for each profile. In a credit fintech, for example, it will be possible to get better rates based on the customer’s financial history. This advance will be just another step within a segment that is undergoing constant renovations.

Understanding Credit Card Cash Funds and How to Use It

Having a credit card has many benefits. Besides being able to be used for shopping transactions, credit cards also offer cash loan facilities for users. The loan can be an alternative source of funds to open a business or start a business.

If a credit card user needs a loan, you can take advantage of the credit card cash facility. The money comes from your credit card limit. Usually the loan value is around 40-50% of the remaining credit card limit.


Understanding Credit Card Cash Funds

Understanding Credit Card Cash Funds

Then the loan will be sent to your account. The bill will be added to your credit card bill so you can pay in installments every month. So don’t be mistaken, credit card cash is different from credit card cash withdrawals at ATMs. The difference lies in the maximum limit of funds that can be disbursed and interest.

If the customer withdraws the credit card cash, get ready to charge and high interest. While cash withdrawal funds are lower with a tenor in accordance with the policy of the credit card issuing bank. There are banks that set up a period of 3 months to 24 months with an interest of 1%. The longer the tenor, the lower the interest rate.


Credit Card Cash Mechanism

Credit Card Cash Mechanism

A simple example like this, you have a credit card with a limit of $50 million, and only used $10 million this month, meaning there is still $40 million left. Then, the card issuing bank offers you a credit card cash facility. Because you need to make additional capital, you agree to the offer.

After you meet the requirements, because the maximum loan value is only 50%, a liquid loan worth Rp20 million. The next stage, you just repay the debt along with the interest according to the specified tenor.


Same with KTA Products?

money loan

Many people equate a credit card cash withdrawal fund with an Unsecured Credit (KTA) facility. But if examined, there are differences between the two. Let’s discuss the KTA.

Understanding KTA is a bank loan product without asset collateral. So customers don’t need to be confused about having collateral to apply for a KTA. Need funds quickly, KTA solution. Whether it’s for business capital, wedding costs, medical expenses, to home renovations.

The loan repayment process is done in monthly installments, the period of which is also determined by you. Usually ranges from 12 months to 60 months. If you are late in paying the installments or pay them before they are due, then there is a penalty fee charged.

In addition, many are tempted by KTA because of low interest promos, such as 0.99% per month. But if you pay attention again, KTA loans calculate interest in a flat 0.99%, meaning that the amount of interest expense per month is still (flat), even though the remaining principal loan continues to decline every month.

The calculation of effective interest is more accurate when compared to flat interest for a borrower, because interest is calculated based on the remaining principal of the loan. Flat interest calculations, it will look as if the interest is small, even though it is not.

If the calculation of flat interest is converted to effective interest, then we actually borrow with interest of 21% to 24% per year or 2% per month, not 0.99% anymore.


Cash Credit Card or KTA, Which Which?

Cash Credit Card or KTA, Which Which?

Credit card cash and KTA cash facilities have the same benefits as an alternative source of funds. Each has advantages and disadvantages, so as a customer, you need to know all the conditions when applying for the loan. Now, the choice is yours. But one thing to remember, the name of the debt must be paid on time so as not to cause other problems that will result in debt swelling.

This is often the reason to apply for a loan

Getting finance is a real nightmare for many self-employed. Banks are becoming more and more restrictive when it comes to lending, especially if you can’t just provide your car or house as security.

The chance of a bank loan for the self-employed is slim. It is, therefore, no wonder that the World Bank measures the global financing gap for small and medium-sized entrepreneurs at around USD 2 billion.

True to the motto: “A bank is a place where you can borrow money if you can prove that you don’t need it”. In the case of the self-employed, however, income often fluctuates due to the season.

This is often the reason to apply for a loan

This is often the reason to apply for a loan

Banks often take relatively old data into account when checking their creditworthiness. So the last income tax assessment may have been a while ago. If a business has developed well since then and the bank is not looking at individual BWAs, it can be very difficult to prove that the business has developed positively.

And if you have a negative Credit Checker entry, you don’t even have to register with the bank.

In many cases, the self-employed do not get a loan and therefore cannot invest enough in their sales, pre-finance goods, and larger orders, even though they have a strong credit rating. This is annoying because solid financing is an important part of growing business.

If every company had to save the necessary funds for larger investments before the investment could be made, many profitable projects would never come about.

So how do you get a loan despite being self-employed?

So how do you get a loan despite being self-employed?

1. Foreign banks: If you are missing the Credit Checker information, you can secure a loan from a foreign bank. Credit Checker plays no role here so that a loan with sufficient income can be obtained from a permanent position.

Of course, certain requirements are also checked at a foreign bank. The amounts of such Credit Checker-free loans start at around USD 3,500. In addition, you should always be aware of additional costs, as these often arise in such cases and are not always communicated very transparently.

2. Credit from private investors: In order to fill the financing gap, a number of online loan brokers have been established in recent years.

This includes Good Credit, a global online loan broker that specializes in self-employed and small business loans. The loans at Good Credit are unsecured and Good Credit does not ask Credit Checker.

Instead, the creditworthiness is checked with the help of online accounts, in which the self-employed person connects to Good Credit during the borrower check. Good Credit then receives a one-time reading right, for example, on your PayPal account and checks the creditworthiness.

A loan despite self-employment is possible if you are willing to look for alternatives beyond the banking world. There are specialized providers on the Internet that are geared towards the needs of the self-employed and entrepreneur.

When is a loan suitable for the self-employed?

Now we know how to get a loan in Germany despite being self-employed. But when is a loan worth it? There are three scenarios in which a loan makes sense:

1. Finance sales growth

Many self-employed people run a profitable business. In such cases, the need for financing increases with sales, especially for dealers. Since suppliers first have to be paid out of their own pockets, many self-employed cannot afford to keep up with the financing of the increasing inventory.

Without the financing of the necessary goods, orders cannot be accepted and sales do not grow as quickly as they actually could. Such a situation can be avoided with a loan and additional sales can be generated.

2. Bridge liquidity bottlenecks

Most self-employed workers are aware of seasonal fluctuations in sales. Sometimes there are even fads that cause demand for certain products to skyrocket or crash – without anyone having been able to plan it.

Seasonal or fashion-related liquidity bottlenecks can be bridged with a loan in otherwise well-functioning business. In such cases, it is worth investing and expanding sales in well-running areas instead of falling into hibernation and hoping that things will go up again.

3. Buy larger quantities at cheaper unit prices

If you negotiate well with your suppliers, you can often achieve price savings with larger quantities. Most wholesalers and producers give bulk discounts on larger purchases. It is often impossible to finance an expensive purchase from your own pocket.

In addition, the popular cash discount can often be drawn if you pay immediately. But you need sufficient liquidity for this. The savings that can be achieved from volume discounts and cash discounts are often higher than the interest paid on a short-term loan.

Make Sure to Submit Credit Cards Translucently This Way

The credit card application process is not that complicated. Because the documents and procedures needed are basically not so much. However, what makes you nervous is whether your credit card application can be transparent or not.

Case in point, there is someone who has a high income, but his credit card application is not approved. In other cases, some people who have a UMP (Provincial Minimum Wage) have gotten their first credit card.

How could it be like that? Come on, let’s understand the ins and outs of the following credit card submission.

Applicant Criteria and Requirements for Filing a Credit Card

Applicant Criteria and Requirements for Filing a Credit Card

In general, the criteria that you must meet before applying for a credit card include:

  • Minimum age of 21 years and a maximum of 55 years.
  • Minimum income according to UMP.
  • Have a good credit history.
  • Complete the requested documents and follow the proper submission procedure.

The documents for filing credit cards at various banks include:

  • Personal identification document in the form of a KTP.
  • NPWP (Taxpayer Identification Number).
  • Payslips or proof of income.
  • Account movements in the past three months.

Not many documents needed, right?

Credit Card Filing Procedure Up to Approval


Next is the procedure for submitting a credit card to the approval process that you can follow.

1. Fill in the credit card application form

You can get the submission form by choosing these methods.

  • Come directly to the bank.
  • Visit credit card marketers, usually in malls or shopping centers.
  • Visit the credit card product comparison site.

Next, fill in the fields provided in the form according to your accurate data. You can also return the form to the bank clerk or credit card marketing.

Information that usually needs to be filled out on these forms includes:

  • Personal data including ID card number.
  • Amount of income.
  • Relative data (relatives not at home).

2. Complete the requested documents

While filling out the credit application form, you can prepare the required documents. Do not miss any of the documents required, yes.

Usually, the documents requested are original and photocopy. In addition to the aforementioned documents, there are several credit card issuing banks that also ask for a photo of your credit card that you already have as reference material.

3. Verification by telephone

Forms and documents have been sent to the bank either through marketing staff, now is the time to wait.

Don’t miss this waiting process! At this time it was actually the verification phase by telephone. The bank needs to make sure that you really are applying for a credit card, not someone else on your behalf. Then, they will also verify the data that you provide.

Likewise with relatives or non-housemates that you listed on the form. Make sure the answers the phone call from the bank who wants to verify the data.

After the verification process, the bank will analyze the entire procedure for your credit card application. The bank will give a notification of whether your credit card application has been approved or not.

If approved, then the credit card will be sent within about one or two weeks after notification of approval.

Tips and Tricks so that Credit Card Applications are Approved by Banks

Tips and Tricks so that Credit Card Applications are Approved by Banks

Here is the answer to why credit card applications can be rejected, even though the income is quite high? Or, you feel that you have fulfilled the criteria and requirements of the requested documents in full, but the credit card application has not been approved.

Here are some things you should pay attention to when applying for a credit card. Follow the following tips and tricks!

1. Choose the right credit card

The credit card issuing bank chosen must match your profile. First, make sure the type or limit of the credit card you choose matches your income. Second, make sure that the credit card issuing bank does not require credit card ownership.

2. Choose a bank that manages payroll from the office / private company

Another trick is to choose a bank that is used for payroll. Because the bank will easily see income history. Because one important consideration for the bank is to make sure you really make money and the data entered is not fake.

3. Make sure the cash-flow savings smoothly

What if you want to apply for a credit card from another bank that is not used for payroll? Or, your salary was not transferred, but given in cash by the company?

The trick is to make sure your cash-flow savings smoothly by always depositing salaries into the account. Do this for at least six months before applying for a credit card. That way, the bank will see that you do have income.