Bank loan or quick loan?

This may be a bank or a company offering online loans. Which is better?

Bank versus loan company

To grant a loan, a bank requires the customer to provide a range of documents, such as a photocopy of an identity card, an employment certificate or contract, a salary certificate, or account statements for a specified period (from 3 to 12 months). After submitting these documents, the applicant must wait for a decision to approve or reject the loan application, which may take from one to several days if a weekend or public holiday occurs in the meantime. Once the application is approved, the customer must go to the bank to sign the agreement, after which the money is transferred to their account. As can be seen, this is quite a time-consuming process and requires the submission of numerous documents.

A loan company focuses on speed and convenience. Wonga is an excellent example, as everything is handled on its website. No documents need to be sent to submit an application—the customer fills in a form with their personal details, declares their monthly income, and states the number of dependants in their household. After the data is submitted, the application is verified within 15 minutes, and if it receives the “green light,” the cash will appear in the borrower’s account within the next several minutes.

Credit Information Bureau

The Credit Information Bureau, or BIK, is an institution that collects data on people who use loans and credit from banks and SKOKs (cooperative savings and credit unions). It records such matters as the timely payment of obligations, overdue repayments, problems with bailiffs and debt-collection companies, and so on. People who have no negative history there are considered trustworthy customers. However, if their history is not clear, obtaining a loan may be difficult. Still, one should not give up immediately—if the negative entries are not serious, for example, if repayments were made a few days late on several occasions, such minor “sins” may be accepted.

Why is it worth maintaining a good BIK history? Both banks and loan companies check a customer’s data with the Bureau before deciding whether to grant a loan. If you have not previously had payment problems, there is nothing to worry about—the loan will certainly be granted.

Repaying the loan

At a bank, a loan is usually taken out for one of the periods offered by the bank. This may be three months, six months, or longer. The amount is paid each month, and if the customer wants to settle the matter earlier, they must pay an additional fee.

With a loan company, you can borrow an amount for a period you choose yourself. At Wonga, this is a maximum of sixty days. The loan is repaid in a single instalment, meaning it must be repaid in full at once, so when applying for credit you must be sure that you will be able to settle it. A loan taken out from a loan company can be repaid early at any time—there are no costs or additional fees for doing so.

Additional benefits

When taking out a loan from a bank, customers are often offered additional services, such as loan insurance or a shopping card. These are often unnecessary, but an unaware customer frequently decides to accept the offer, thinking that it will increase their chances of having their credit application approved.

A loan company has simple and clear rules—it offers only cash, without any additional proposals. It may occasionally offer other kinds of benefits to its customers. Wonga has a Benefits Programme for people who use its loans from time to time. It enables them to participate in online courses about online finance and secure financial transactions, and completing the courses grants the customer a special status. As a result, they can take out loans at a significant discount of up to 42%.

So whom should you choose?

Loan companies offer moderate sums ranging from 50 to 2,500 złoty. It should be noted that the first loan taken from such an institution is subject to limits—in Wonga’s case, this is 750 złoty. These small loans are intended as short-term assistance in an unforeseen life situation, such as car damage, illness, and so on. If you need more cash and want to repay it in instalments, a bank has a better offer. However, it should be noted that many companies offering online credit also offer instalment loans to verified customers. Since they operate faster than banks in this area as well, it is worth checking whether it is possible to take out a larger loan in this way. Wonga has such an offer for its customers; to obtain information about it, contact the company through its website.

If you are interested in finance, you should also visit the educational platform www.kapitalni.org.