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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.