Why is it better to avoid loans for a promissory note?

When borrowing money for a promissory note, you must ensure that the amount entered in the promissory note corresponds to the loan on the contract. The borrower bears the greatest risk with blank bills of exchange for which there is no amount. It is supplemented by the lender on its own

Bill of exchange in Polish law

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In the provisions of the Bill of Exchange Act of April 28, 1936, you can find the exact conditions that must be met by a promissory note. This is a security that secures repayment, among other loans.

According to the law, a promissory note, in the absence of repayment of a financial liability, allows you to assert your rights effectively on the court and by enforcement.

The promissory note document should have a written form.
In art. 1 of the aforementioned Act, it was specified that the bills of exchange must contain the elements:

  • determining that it is a promissory note (in the language in which the promissory note is issued),
  • order for unconditional payment of a designated sum of money,
  • the surname of the person obliged to pay (drawee),
  • designation of the payment deadline,
  • designation of the place of payment,
  • name of the person on whose behalf or on whose behalf the payment is to be made,
  • date and place of issue of the bill of exchange,
  • bill issuer’s signature.

There is also a blank promissory note whose characteristic is the lack of indication of the amount of the liability. Such security gives the possibility to pursue any amount of liability and constitutes a serious threat to the drawee.

The loan is secured with a promissory note

The loan is secured with a promissory note

With low creditworthiness, lenders must bear the high risk of not repaying a financial liability if they decide to grant it to the borrower. However, they can be offset by various types of repayment security, e.g. bill of exchange.

A promissory note loan will secure the interests of the lender, but it can be risky for the borrower. It all depends on what bill we will deal with. If it is a blank promissory note, in practice the customer will sign it without a specified amount of the commitment. In this way, dishonest lenders can gain a lot.

In accordance with the law, they could then enter any amount on the bill of exchange, which may significantly exceed the value of the loan granted. Even referring the case to court will not do anything to the client.

The court will only check that the promissory note submitted meets the formal requirements. At the same time, it will not analyze the legitimacy of indicating the bill of exchange such and not another amount.

Burn loan installments by up to 30%. 

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Therefore, you should be careful which promissory note is signed when borrowing. When deciding on a blank promissory note, the borrower even risks losing all of his assets.

Legal changes in non-bank loans – what will change?

In December 2016, the Ministry of Justice announced the preliminary assumptions of changes regarding the so-called anti-usury regulations.

A significant reduction in the limit of acceptable borrowing costs

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These changes assumed, among others, a significant reduction in the limit of acceptable borrowing costs. The proposals of the said ministry were radical enough that they met with resistance from other members of the government.

About two years after the fiasco on reducing the cost of “moments”, the Ministry of Justice again announced its intention to regulate the loan market. We decided to check whether the proposed regulations could severely hit the Polish loan industry.

Of course, it is worth remembering that for the time being, we are talking about initial solutions that have not yet been approved by the government.

The new limit on the cost of “moments” is to be slightly lower

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Overly restrictive cost limits for consumer loans were the reason that the previous plans for additional regulation of the loan market have fallen into the back. It is worth recalling that at the end of 2016, the Ministry of Justice wanted the maximum non-interest cost of consumer credit to be:

  • 10% of the amount borrowed (commission)
  • 10% of the amount borrowed per year (other costs)
  • 75% of the amount borrowed throughout the repayment period

60 loan companies in one place. 

These rates were much lower than those still in force today. Under current regulations, the commission for granting a loan may not exceed 25% of its value, and other non-interest costs should not exceed the 30% threshold per annum (see Article 36a of the Act on consumer credit).

All non-interest costs (throughout the loan period) cannot currently be greater than the loan amount.

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The cost restrictions proposed by the Ministry of Justice at the end of 2016 were so radical that even banks and credit unions started looking at them with concern.

This time, the institutions mentioned above have no similar cause for concern, because the new regulatory proposal is much milder. This does not mean, however, that the non-bank lender will be satisfied with the plans of the Ministry of Justice.

As part of their initial proposals, representatives of the Ministry of Justice have announced that all non-interest costs of consumer loans (including non-bank loans) will not be able to exceed:

  • 20% of the amount borrowed (commission)
  • 25% of the amount borrowed per year (other costs)
  • 75% of the amount borrowed throughout the repayment period

Burn loan installments by up to 30%. 

cash

If such regulations come into force, the non-interest cost limit for the annual loan will drop from 55% of its value to 45%. In the case of a two-year loan, the same change will be greater.

We are talking about a decrease in the maximum non-interest costs from 85% to 70% of the amount borrowed. According to the proposal of the Ministry of Justice, the non-interest cost limit for a three-year loan is to drop from 100% of its value to 75%.

As for loans for a short period (e.g. 1 month), the main change will be associated with a decrease in the cost limit independent of the time of the loan. Such costs will drop by one-fifth (from 25% to 20% of the amount borrowed).

According to planned regulations, the maximum non-interest cost of a loan for 1 month will fall from 27.5% to 22.1% of its value. As in the case of “moments” for one, two and three years, the companies offering the most expensive loans may be afraid of change.

Without paycheck and without guarantor: is it possible to obtain loans for housewives?

It is not easy for a housewife to obtain a personal loan, since financial institutions require income or working guarantees to grant it, such as a paycheck or contract, or possibly a guarantor. This however does not mean that there are no loans for housewives, on the contrary! Let’s see then what are the best solutions in this regard, and if it is possible to obtain a loan online.

Some guarantees, even if minimal, are necessary

Some guarantees, even if minimal, are necessary

When you ask for a loan from a bank, you know, the more guarantees you can bring, the easier it is to receive the amount you need (see also Bank credit). For a loan for housewives this is even more true: since you do not have a traditionally intended job (even though the housewife is a job in all respects) you need to present a guarantor (a close person who can guarantee the payment of the installments) and it would be preferable to demonstrate an income or savings capacity, such as a checking account or registered properties.

Obviously, then, you must not be reported by the Crif as bad payers and you must not have suffered any foreclosure. In summary, applying for personal loans without a paycheck and without a guarantor becomes particularly complicated (sometimes you can overcome this difficulty by signing bills or promissory notes).

One of the interesting solutions for a loan to a housewife is the request for a revolving credit card (i.e. credit cards that do not provide the balance at the end of the month but in small monthly installments). Obviously the amount granted will not be very high (usually it reaches 1,500 USD), but it can be enough to make purchases for the family or for some unscheduled medical expenses.

Online loans: low amounts and only if you work part-time

Online loans: low amounts and only if you work part-time

A loan for housewives can also be requested online from the bank or finance company when required. In this case, however, there are conditions: the amount requested must be contained (up to $ 3,000) and at least part-time employment is required. If the housewife is unemployed, the personal online loan will become really difficult without the presence of guarantors.

The first condition (part-time job) is however full of alternatives. Let’s say that a housewife needs a loan of 3,000 USD for dentist care and is willing to pay a monthly payment of up to 300 USD. Lite Lender Company allows, for example, a very convenient solution with 18 installments of 179.50 USD with Tan fixed at 9.51% and Taeg fixed at 9.93%. All documentation can be sent online, thanks to the digital signature. Interesting is also the possibility for housewives who work part-time to use the platforms for loans between private individuals.

These are payment institutions, authorized by the Cream Bank, which do nothing but connect with each other those who need a loan with those who can make sums of money available. This occurs after a careful assessment of people’s reliability. To apply for a loan from these platforms  you will need to present an identity document, a demonstrable income (from subordinate, self-employed or atypical work) and a bank or post office account. Once the online request has been accepted, the delivery also takes place online safely and quickly.

If you are unemployed: guarantor or mortgage on some property

If you are unemployed: guarantor or mortgage on some property

What if you fall into the category of unemployed housewives? Here the banks, although softened in recent years, lend sums only if there is the presence of a guarantor for the housewife (such as a son or another close person).

Alternatively, you will have to prove that you have rents (perhaps from some rental of apartments or estates) and that you have a checking account or a savings account (because maybe the housewife has a job in the dark). The last alternative could be to place a mortgage on a property: on one’s home or on other possessions.

Installments 0 – all loan offers with a 0 percent installment

Is it possible to buy a washing machine, TV or installment computer without paying anything above the price of the device? It turns out that the most. 0 percent installments, available in many electronics stores or furniture stores, also encourage customers to make shopping decisions, buy more and more often. What exactly are zero percent installments?

Installments 0 percent – is it possible?

Installments 0 percent - is it possible?

Seeing the poster in bold letters “Promotion 0 percent installment” or “Real installments 0 percent”, the consumer begins to wonder if it is possible that he will buy a computer or a fridge in installments and will not pay any interest? It turns out that, in fact, 0 percent installments are not a marketing ploy, although you can’t deny them that they are effectively attracting the attention of consumers.

What are the 0 percent installments? On the fact that the bank or loan company does not charge interest. The nominal interest rate for such an installment loan should be 0 percent.

In fact, the real 0 percent installments are that the borrower repays his debt without interest, i.e. he should pay back to the lender or lender exactly the same amount he previously borrowed.

Installment loans 0 percent in loan companies and banks

Installment loans 0 percent in loan companies and banks

Knowing that 0 percent installments allow you to buy home appliances and electronics without having to invest in your savings, you should think about who will grant a loan with real installments without interest. If we are interested in getting a 0 percent installment loan, where can we get it?

Both non-bank companies and banks have such an offer for Polish consumers. In the first case we deal with 0 percent installment loans, and in the second case – loans. Most often, you can apply for zero percent installments directly in home appliances, electronics, building materials, and furniture stores, as well as at some loan companies.

When buying household appliances, computers or furniture, we deal with interest-free installments, which are in fact offered by banks cooperating with sellers. Therefore, when purchasing in installments in such places, we really sign a loan agreement and we have to meet it in accordance with the arrangements made.

Not everyone has the opportunity to make such a commitment. The zero-percent installment promotion in the bank is not available to consumers who:

  • they don’t have enough creditworthiness,
  • they do not have a stable income from reliable sources,
  • have a negative credit history at the Credit Information Bureau.

On the other hand, loans with 0 percent installments can be used for any customer loan purposes, and the procedure for obtaining them is much less demanding and complicated compared to a bank loan. Loan companies often encourage new customers to take advantage of their offer, offering them 0 percent installment loans.

This is a one-time offer, so using it means that the consumer will not be able to incur liabilities with zero percent installments again in the same loan company. Can I use the 0 percent installment loan offer online? By all means, lenders grant loans in installments to clients who meet the requirements, verify their identity and submit an appropriate loan application.

Generally, buying 0 percent installments online, you have to reckon with the fact that real purchases will reach us in a prolonged period because the goods must be sent from the online store to the address indicated in the order.

Do 0 percent installments mean a free loan?

Do 0 percent installments mean a free loan?

Real 0 percent installments consist in the fact that the bank or loan company does not charge any interest when granting the client an obligation. Therefore, the borrower returns in monthly or weekly installments exactly the amount he borrowed. Therefore, if the 0 percent installment promotion leads to a USD 2,000 loan for 4 months, the customer should pay USD 500 to the bank account indicated on a monthly basis.

Installments 0 percent – how not to be fooled?

When signing a loan or credit agreement as part of a 0 percent installment contract, you must carefully check the terms of repayment. Some financial institutions can only seemingly grant 0 percent installments.

Sometimes installments are not supplemented with interest, but this does not mean that the loan is completely free. Banks and loan companies may add costs to the client:

  • commission for joining the committee,
  • for examining the application,
  • Insurance,
  • use of additional products.

As a result, the 0 percent installment promotion ceases to mean that we take out a loan for free. We can find out whether it is paid and to what extent by controlling the APRC level.