Microcredit and its terms
A microcredit is a low-value loan granted by a bank to people who need a small amount of money to start a business. The basic condition of a microcredit is that it be granted for a strictly defined purpose, very often to establish a new company or develop an existing one. A microcredit is also intended for people looking for a larger amount of money, as its upper limit may sometimes be as much as PLN 300,000.
To obtain a microcredit, the bank usually assesses our creditworthiness individually—typically at a bank branch. The maximum loan term is usually around 36 months, and the bank can offer flexible debt-repayment options, such as monthly or quarterly instalments, or a one-time payment at the end of the loan term. At the same time, some banks can offer us a loan of up to PLN 100,000 without material collateral.
Microloan
A microloan is a small loan granted by non-bank financial institutions, often for a short period of 30 to 60 days. However, the term may also be longer, in the form of instalment payday loans. The amount of such a loan is also not large and ranges from PLN 50 to PLN 7,000. Unlike a microcredit, a payday loan may be used for any purpose and, depending on the lender selected, may be available without certificates or even checks in registers.
Above all, any adult who has an identity card, a mobile phone and a bank account, and lives in the country, may take out a payday loan. At the same time, the loan can be tailored to our financial capabilities and expectations because many options are available, such as:
- a loan secured against collateral, e.g. a car
- a loan with a guarantor
- an instalment loan
- a short-term loan without a guarantor (often free of charge, with no costs)
In summary, a microcredit and a microloan are different financial services characterised by different terms, loan amounts and costs. Nevertheless, due to the wide range of services offered, practically everyone can find something for themselves and choose the product best suited to their needs.