Categories

## Money for a holiday – cash loan or card payment?

For the sake of clarity of the example calculations of both cases of lending, we assumed that to finance a holiday trip we need exactly 6,000 USD. We will repay this amount in equal installments over the year.

## Cash loan

Taking into account the above assumptions, we have prepared examples of financing offers, which were based on average market indicators and presented in Table 1.

Offers were ranked not in relation to the amount of the monthly installment, but on the basis of the total cost of financing reflected by the APRC level, i.e. after taking into account any possible fees due to e.g. commission for granting a loan.

As you can see, it is important not to focus on the nominal or installment interest rate each time you choose a loan, but rather on the actual annual interest rate, which – as we wrote above – reflects all costs of lending.

Table 1 shows that the cost of our sample loan can reach very different values. The lowest of the sample offer assumes the cost of servicing financing at the level of USD 532.62 in the case of APRC at the level of 17.23%.

In turn, we would pay the most for the loan in the case of offer No. 8, where the APRC is as much as 29.65%, and the total cost of financing is USD 842.51.

## Credit card

On the other hand, in the case of credit cards, we examined interest costs per year for an interest rate range between 12.5% ​​and 17.0% and a step increase of exactly 0.5%. These costs, calculated using the very simple PMT Excel function, are included in Table 2.

According to its indications, the lowest interest cost is USD 413.97, while the most we will pay of course for cards with an interest rate of 17.0% per annum, i.e. USD 566.74.

In the case of credit cards, however, this is not all, because you should also include at least the annual fee for using the card, the amount of which can reach even over USD 200.

An additional cost may also be a commission for establishing an installment payment. It is not charged e.g. in the case of the Comfort Installment Plan of Good Finance, but on the other hand it is 1% (minimum USD 5) for the Installment Plan of Credit Agricole. In our case, it would cost exactly 60 zlotys.

In conclusion, it can be said that the issue of the advantage of credit cards over cash loans is not at all obvious. However, attention should be paid to two very important features of card debt.

## Re-examine our creditworthiness

First of all, there is no need to re-examine our creditworthiness, which was determined by the granting of the card and its limit.

In addition, taking into account the annual bankruptcy information of a travel agent, a credit card is also a secure solution. This is the result of the possibility of using the so-called chargeback.

It allows you to advertise a given card transaction and recover the payment amount in the event of the bankruptcy of the travel agency mentioned above.

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## What are the benefits of a trade credit?

We are dealing here with the consent of the seller to receive payment for the delivered goods (or service rendered) after the delivery date.

The granting of trade credit may be confirmed by a contract concluded between the parties, general conditions of sale or may result only from the payment date specified on the invoice. It does not require any special legal form.

It is a beneficial alternative to loans granted by credit institutions. Loans granted by banks are usually conditioned by carrying out a complicated procedure that requires the borrower to meet many conditions. Trade credit eliminates the banking path and enables crediting of trade between contractors.

Trade credit is also competitive for bank loans due to costs. It is referred to as the cheapest loan because thanks to it the buyer has the option of selling the goods even before the payment date, and thus does not have to engage their own funds for this period or run revolving loans.

Therefore, it may for some time have other people’s resources at its disposal or create a reserve fund, guaranteeing that payment deadlines are met and, as a result, maintaining liquidity.

We have it at Camille: Cash loan – choose the best offer for you

Recognizing it as the cheapest loan depends, however, on the use of the discount institution (rebate) together. Used without the support of this instrument, it may not be too cheap, but not complicated, and therefore attractive and quick to obtain.

In legal terms, trade credit is a special type of credit, where the partners are business entities that are not financing institutions.

A regular sale/purchase transaction will change into a trade credit if the transaction partners agree to defer payment. The number of days between the release of a good or the provision of a service and the payment deadline is called the credit time.

## Supplier’s market and recipient’s market

Trade credit operates in some industries independently, without the support of additional financial instruments. This means that the manufacturer sets the payment rules without negotiation, and the recipient has the choice to join or not to enter into such a contract.

In such cases, the producer treats his position on the market authoritatively and does not use additional incentives to acquire the recipient. This is the supplier’s market.

The reverse situation is one in which the recipient of the goods has the advantage and he dictates the terms of payment. This so-called recipient market. Markets with a predominance of customers or suppliers are a sign of economic imbalance. Then no one needs to use additional support, because his position does not require it.

The main burden of trade in the world takes place in conditions of balanced demand and supply, and then additional incentives are needed to use forms of financial support such as trade credit.

## Discount and deferred payment

One of the main instruments used together with trade credit is a discount. This is a percentage reduction in the price the recipient receives if he pays for the goods immediately upon receipt.

In practice, this boils down to the recipient’s choice of one of two variants; or immediate payment in cash or in another form (e.g. check) and the benefit of a rebate, or definitely a trade credit, which is a deferred payment in which the rebate is no longer present.
Of course, obtaining a discount is not only the recipient’s decision, because his position in the legal relationship, characteristic of trade credit, is identical to the position of the debtor, the condition for obtaining this option is always the creditor’s decision. It is he who tests the credibility of the recipient and sets the rules for granting trade credit.

If such a decision is initially made, then only the recipient has the option of a discount or deferred payment. This does not apply if the recipient is not interested in deferred payments, but only in cash, in which the discount is generally granted.

## Trade credit – seller’s risk

The seller is a party that bears a very high risk of a trade credit agreement. That is why, in practice, this loan is granted to companies that you have full confidence and have their basis in a long-term cooperation. The trade-credit is intended for customers who I have no doubt will fulfill their obligations and will pay within a specified period.

The seller who counts on the possibility of granting trade credit to the buyer must consider taking the risk. Customers without proven credibility are treated with a high degree of caution – at the beginning of cooperation they cannot count on receiving deferred payments, and only after some time they can apply for them.

There is a possibility of additional deferred payment security, which allows us to overcome the fear of unreliability in loan repayment. The seller may request the buyer to provide adequate security, in the form of a contract for the calculation of penalty default interest, a blank promissory note, surety, pledge or bank guarantee.

Trade credit collateral is not only measures taken to guarantee repayment of deferred payments. Overdue payments are a serious problem in the economy, and effective debt collection is often a prerequisite for maintaining the company’s existence in the market.

However, it is possible that all deferred payments are paid on time, but the amount of trade credits granted significantly improves the company’s financial liquidity.

Despite the lack of congestion caused by late repayment, there is a “hunger” for funds in the company’s finances. In such cases, factoring as a safe supplement to the trade credit is a supporting instrument.

It helps in the exchange of overdue receivables for cash, thanks to which problems with the current settlement of liabilities disappear and in this way the company’s balance sheet improves.

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## What is the cheapest holiday loan?

Holidays in full and empty in your wallets? We checked which banks would finance your winter fun the cheapest. Take a look at the ranking!

Winter is a period of increased expenses: holidays, New Year’s Eve, heating costs, carnival and, finally, holidays, for which there is usually no more cash in your wallet. As Good Credit has checked, as much as 31% have problems financing winter trips. Poles. What do our countrymen do most often in such situations? They take loans. There is nothing wrong with this, but it is worth checking where such a commitment can be made the cheapest.

## Cheapest holiday loan?

So we decided to look at the offers available on the market. What assumptions have we made? Simple – we are looking for a loan of USD 40,000 USD with a 60-month repayment period. We asked banks to calculate farms with a monthly net income of USD 4,525. We have arranged the offers in terms of the most sensitive parameter – a monthly installment. In total, we compared 15 proposals. Our calculations have shown that the monthly installment may range from 814.62 to as much as 959.05 USD.

The Good Finance offer proved to be unrivaled. The total cost of the loan was USD 48,877 and the monthly installment – USD 814.62. All thanks to an interest rate of 4.99 percent. and 7.90% commission

Good Lender has also prepared a favorable offer. The monthly installment proposed by this institution was higher by just under USD 20, but unfortunately for 5 years, it will translate into USD 1,157 more of the total amount to be paid (48,877 vs. USD 50,034). This result was affected by an interest rate of 4.99%. and a 10.50 percent commission

## The last noteworthy offer has been prepared by Fine Bank

Unfortunately, here the losses to the winning Good Finance were even greater: almost USD 40 on a monthly installment, which translated into USD 51,160 of the total amount to be paid (i.e. as much as USD 2,283 more than in Good Finance). This result was affected by an interest rate of 6.14 percent. and 9 percent commission.

Other banks have prepared offers in which the total cost of the loan exceeded USD 51,300 and in the least favorable offer reached USD 57,543, which was USD 8 666 higher! Surprised?

Categories

## Is cash loan for regular customers cheaper?

The financial crisis has limited universal access to credit. Banks have introduced a more restrictive policy and raised requirements for applicants mainly for mortgage loans.

A similar situation occurs in the case of cash loans, which are already granted from 1 thous. USD and the highest amount USD 200,000 can be obtained from Good Finance Bank.

## A quick injection of cash

“Cash” is a quick injection of cash, because as the Good Credit bank advertises, credit-granting decisions are made in just 10 minutes.

Short waiting times are a very important feature of credit, but you should also analyze other parameters and, most importantly, do not make such a decision lightly. A quick decision can cost us a lot and long.

## Preferential offer for existing bank customers

The cost of the loan is mainly determined by interest and commission, as well as other fees, such as insurance. The search for the most attractive loan should start with the bank whose services you use.

Financial institutions very often prepare a special, very attractive offer for their regular customers. Such a name is used for people who, for example, have kept a personal account at a given bank for a minimum of several months.

What’s more, banks can include bank cardholders of a given bank, deposits, investment units or people who already have and regularly repay another loan. It is important that the history of a given client with the bank is unqualified, i.e. without problems with paying off existing liabilities.

## Reducing the commission charged on the loan

The bank may or may not reward a loyal customer. However, some institutions see such a need and reward the customer by preferential interest on loans and reducing the commission charged on the loan.

The second important cost is the commission. It is a cost ranging from 0% – 5% of the loan amount. The commission is charged in advance and may increase the loan amount or reduce what is paid out by the bank.

Almost all banks set the highest level of commission for new customers, i.e. 5%. There are, however, the bank offers where the commission is not charged, i.e. the rate is 0% – e.g. Good Credit – however, this is conditioned by using other products from the Banks’ offer.

Banks present more attractive offers to their regular customers because they have more information about them (they know the customer’s credit history).

However, this does not mean that the cheapest loan can be obtained from the bank where you have the current account or another account. Sometimes the competition’s offer is cheaper, but it entails the need to buy more bank products (e.g. bank account, insurance or credit card).

Let us remember that good cooperation with a bank always pays – measurable savings it usually brings when taking loans – regular customers just pay less!

Categories

## Loan without Credit Information Bureau online – quick loan offers

A loan without a Credit Information Bureau is a product that you can take without leaving your home. Importantly, a loan without the Credit Information Bureau via the Internet is usually available as proof, without the need to attach additional documents to the application.

A negative entry in the Credit Information Bureau – Credit Information Bureau – results from delays in repayment of loans, borrowings, installments or bills. The borrower may refrain from paying his debts due to the difficult financial situation, but this does not change the fact that such a person’s data will be in the Credit Information Bureau – with a negative assessment. This will definitely affect the possibility of taking a loan from the bank, but a quick loan via the Internet without the Credit Information Bureau may still be available to these people.

## Loan without Credit Information Bureau via the Internet

Many loan companies, while verifying the creditworthiness and creditworthiness of potential borrowers, are already checking the Credit Information Bureau databases, which only a few years ago were available only to banks and cooperative savings and credit unions.

More and more lenders in Poland undertake cooperation with the Credit Information Bureau, but at the same time, there are still loan companies that declare that they offer loans without the Credit Information Bureau via the Internet.

## This means that they are provided without verification

Of the Credit Information Bureau databases. This creates the chance for a quick loan without the Credit Information Bureau, via the Internet, in 15 minutes for people who for various reasons have stopped paying back a bank loan and, as a consequence, have negative entries in their loan history.

A borrower or borrower who has delayed the payment of the liability to the bank or loan company by at least 60 days may be entered in the Credit Information Bureau.

In this situation, the institution granting the loan (in cooperation with Credit Information Bureau) may, in accordance with the law, enter its client into the Credit Information Bureau database. However, he must earlier request him to pay the arrears together with the information that failure to pay within a period not exceeding 30 days will result in entering him into the Credit Information Bureau database.

## What is it characterized by?

In the offers of non-bank companies, you can often find offers of loans without Credit Information Bureau via the Internet, which are provided as proof on the basis of a loan agreement, without controlling the Credit Information Bureau databases.

At the same time, you should be aware of the fact that a loan without Credit Information Bureau via the Internet, granted online, may involve checking the client’s financial and credit standing in other debtors’ databases, including at KRD, ERIF or InfoMonitor Economic Information Bureau. Therefore, when registering in BIGs, consider the possibility of refusing a loan by a non-bank company.

In such cases, you need to look for a loan online without the Credit Information Bureau and KRD, which means that loan companies also do not check the National Debt Register when verifying the client’s loan application. Fast loans online without Credit Information Bureau are then available even for indebted people, but you have to expect slightly worse credit conditions.

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## What does taking a cash loan look like

Good Finance is a comparison tool that lets you find various banking products in one place – loans, accounts, deposits and credit cards. With Good Finance you can easily compare offers and contact banks. As a team of analysts, we regularly check whether the offers are current, we suggest what to ask an advisor and what questions you can expect during a conversation with the bank.

We go through bank processes just like you do. We submit a request for a cash loan with the offer of interest in the cash loan ranking. Then enter your contact details and wait for a phone call from a bank adviser. What happens next?

## Cash loan at Good Credit – I’m sending an inquiry and what next?

Before talking to Good Credit, prepare your ID card and think about how much you spend on a monthly basis that you cannot give up (these are called fixed expenses, i.e. fees for housing or bills). Make a note of information about your employer name, tax identification number, address and remember when you have been working with him. Also, have on hand the account number to which the bank should transfer the money to you.

When you answer the call, an advisor from Good Credit will ask you preliminary questions, including do you achieve stable income from min. 3 months in the case of an employment contract, min. 6 months in the case of a mandate contract and min. year for your own business. The adviser will also ask you if you are a bank customer. This has an impact on how your credit process will go on.

## If you have adequate seniority and stable income

Then the adviser will propose you to complete the loan application. It takes about 10 minutes and you will hear questions about:

• first name and last name,
• PESEL number,
• marital status,
• Place of birth,
• citizenship,
• type of identity document (ID, passport) and its series, number and expiry date,
• Phone number,
• loan amount and period,
• do you decide on credit insurance,
• where do you live (house, flat, ownership, rented, with your family etc.),
• education,
• number of dependents,
• monthly maintenance costs,
• do you pay alimony or a pension to someone,
• what is the form of your employment (employment contract, commission, own activity),
• what credit products do you have or have you repaid in the past (installment purchases, credit cards, account limits, mortgage loans, payday loans),
• don’t you have bailiffs?

• Credit Information Bureau,
• National Register of Debtors,
• BIG InfoMonitor,
• ERIF Register of Debtors,
• Bank Register.

In the next step, the adviser will ask you to stay on the phone and you will have to wait 1-2 minutes for the loan decision. The adviser will also offer you loan terms. It will read the installment amount, the cost of the loan and other parameters (APRC, interest rate, commission).

## Credit insurance is not compulsory, but you can use it

If you want to secure loan repayment in the event of death, job loss or illness, this will be a good choice, but also an additional cost. Do you decide on a policy? The adviser will also ask you questions about your health, income and life situation.

If you accept the offer, the adviser will offer you the choice of installment repayment day and loan payment method. You can choose to collect cash at the branch or transfer it to your bank account. Apart from Bank E-Money, it is the only bank where you can collect money in cash. You will receive all the documents summarizing the conversation and the offer by email.

If you have not been a Good Credit customer before, you must go to any bank branch with an ID card and income documents. During the telephone conversation, the adviser will show you which documents will be needed and can arrange you for a specific date in the branch you have closest to. This will help you avoid queues.

You go to a branch of Good Credit Bank to sign the contract. You receive cash if you have decided to withdraw the loan in this way or you confirm the transfer of funds to your account.

Categories

## Borrower Support Fund – the first attempt to help borrowers in need

The Borrowers Support Fund will be launched at GFI at the beginning of 2016. Its establishment and functioning are regulated by the Act on support for borrowers in financial difficulties who have taken out a housing loan.

The fund, which will exist as part of Bank Good Finance, is to dispose of USD 600 million. Its creation will be financed by banks.

## Establishment of the Fund

The establishment of the Fund in the expected form is a compromise between the demands of Swiss franc holders and the scope of assistance that banks were ready to offer.

Finally, it was decided that not only franchisees but all borrowers who have problems with repayment will be able to count on help. This should be assessed positively, as this has avoided favoring one group.

And so, people paying back mortgages who are in a difficult financial situation will be able to apply for support in the amount of up to USD 1,500. USD per month (if the installment of the monthly commitment is lower, support will be reduced to this level).

## The loan is repaid in a foreign currency

If the loan is repaid in a foreign currency, GFI will convert the amount of the support installment into the currency of the loan repayment according to the sale exchange rate announced by the National Bank of Poland on the day preceding the day of payment of these funds.

The money will be able to be paid out for a maximum of 18 months and will then have to be returned. The borrower will have to return the funds obtained in this way within a maximum of eight years, thanks to the possibility of applying for the debt to be divided into installments. A nod towards borrowers is that they will pay back exactly the amount they have received because the return will not be interest-bearing.

Who can apply for interest-free assistance? The program is targeted at people who have lost their jobs (those who have submitted their termination notice or have been disciplinarily dismissed) will not benefit, as well as those whose installments exceed 60%. household income.

The bill was positively received by the banks. Admittedly, it imposes some obligations on them, but representatives of these institutions cited in the media emphasized that the creation of the Fund will have an undoubted advantage: it will raise the level of social responsibility of the banking sector.

## The legitimacy of helping foreign currency loan holder

They also hope that this will end discussions about the legitimacy of helping foreign currency loan holders because under certain conditions each borrower will be able to use the help.

The Swiss franc loan holders themselves are not exaggerated enthusiasts of the new regulation, because they expected (and even more: proposed specific solutions) something more, primarily the conversion of their loans.

The adopted proposal does not solve their problem, because the repayments are carried out according to the existing rules, and disputes with banks will still be resolved in individual processes.

The solution is, however, beneficial from the point of view of USD loan holders, because they were not excluded from the program. Restricting access to assistance because of the currency in which they took the loan was considered unreasonable and discriminatory.

Finally, the assumptions of the Act in the current formula are beneficial from the point of view of those citizens who have no credit or have no loan but have no problems repaying it.

Money for the existence of the Fund does not come from public sources, so they will not be charged to the budget, and they are also refundable, so no one will be able to claim that some borrowers got some gift from the bank – and it is known that banks do not have their money, so for help, all other customers drop off (in short).

We will find out in a few months how the Fund will actually work and whether it will fulfill the hopes it has placed. May his offer be directed to people who really need help and save them from the spiral of debt, which is easy to fall after the first installment not paid on time.

Categories

## Long-term loans without certificates

In colloquial language, the term loan is used interchangeably with credit, but these are two separate concepts and two different financial products. See what are the characteristics of long-term loans without certificates!

## Long-term loans without certificates – what is this?

Below we present in seven points how long-term loans without traditional loan certificates differ:

1. The loan can be granted only by the bank, and the provisions related to it are specified in the Banking Law. The loan can be granted by a natural person or a financial institution, and the rules for granting it are set out in the Civil Code.
2. The loan is granted for a specific purpose, e.g. purchase of an apartment, car or other consumer purposes. The loan can be used by you for any purpose – you have no obligation to provide it.
3. Granting a loan always involves signing a loan agreement, which will specify the terms of the loan: parties to the contract, loan amount, interest rate, commission, repayment schedule. A loan of up to USD 500 can be taken without a contract, but in the case of higher amounts, you must also sign it.
4. The loan agreement is regulated by the Civil Code, therefore it does not have to be specified in the loan repayment date. Unlike a loan, the loan can be free.
5. The subject of the loan may be money or other items, labeled by grade, quantity, measure or weight. Therefore, the loan does not have to concern only financial resources, as is the case with a loan.
6. The loan is granted from the bank’s clients’ funds and is not your property. The loan is the property of the lender and once it is received it becomes your property.
7. The loan is always granted in the form of a transfer, while the loan can be obtained in the form of cash.

## What distinguishes long-term loans without certificates?

Unlike payday loans, long-term loans can be granted for a longer period of time, for example, half a year, a year, 3 or even 10 years. Loan companies usually use APRC in their offers, i.e. the actual annual interest rate, covering all costs of the loan, not just its interest rate.

Some also provide an effective annual interest rate for a given loan, which is a mathematical measure of investment profitability describing the change in investment value at the end of subsequent interest periods. This means that if you take out a loan for 2 years, you will be calculated on an annual basis – so you can easily calculate the real cost of your loan.

Unlike loans, long-term loans without certificates do not require lengthy and complicated procedures – submission of employment, earnings and business certificates. The loan company will also not always check your credit history – it is very beneficial for people who have had problems paying their debts.

However, there are financial products that you can only receive as an ID card, provided you have a good credit history and you receive income from a proven source.

Minimizing all procedures means that loans without long-term certificates are much easier than loans and can be obtained by almost anyone with real income. The very process of granting a loan from submitting an application to receiving money is very short, while the procedure for granting a loan may take about a month. Therefore, if you only need an amount of up to USD 7,000, a loan is a more convenient and profitable solution, provided that it has no hidden costs.

## Long-term loans without online certificates – how to find them?

You will need the internet to find a good financial product. It is worth checking individual offers on the Good Finance website, where you can easily compare loan offers from different companies.

All you have to do is enter the payday loan category, narrow down your search to loans, select a long repayment period in the search engine, e.g. 2 years, and then enter the amount you are interested in, e.g. 10,000 Here is the list of results:

As you can see, loans can vary significantly in terms of costs, which also affects the high difference in monthly installments.

### Long-term loans – expert summary Good Finance:

When analyzing offers, pay attention to the actual annual interest rate (APRC), taking into account both interest and commission, as well as the provisions in the contract regarding penalties in the event of late repayment.

Some loan companies apply drastic penalties – they also count large amounts for reminders, payment requests or even texting. Also, try not to borrow in the form of a long-term loan without certificates of too large amounts (max. Up to USD 10,000) and do not take loans from several institutions to avoid a spiral of debt.