In recent years, non-bank installment loans have become increasingly popular among Poles. These commitments have become a big competition among others for payday loans. No wonder, installment loans have advantages that are missing from payday loans.
There is no need to convince anyone about the high popularity of non-bank loans in Poland. Just look at the data available at the Credit Information Bureau. In July alone, loan companies granted $ 252,600. loans (more by 11.8% compared to July 2018) for a total amount of $ 634 million (more by 2.8% on an annual basis). In total, from January to July 2019, loan companies granted 1.6 million loans for $ 4.2 billion.
It is also important that loans for higher amounts (over $ 5,000), i.e. most often installment loans, were the most popular in the said period. If we reach for the data from 2018, it turns out that the average loan in the non-banking sector was 9.1 thousand. dollars. Even in 2016, no more than 4,000 were borrowed. dollars.
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An installment loan is a relatively new product in the loan companies’ offer. It has been available for only a few years. Earlier payday loans dominated on the non-banking market. Over time, however, customer expectations changed and loan companies had to adapt to these expectations. It turned out that more and more people who borrowed money online were not consumers with financial problems at all. These are people who would not have a major problem to take a loan from a bank. However, they began to choose the offer of loan companies, because it is available online, you can borrow money easily and very quickly, and formalities are kept to a minimum. Since lenders started competing with the banks for the same client, they had to offer him a new product. This is how installment loans appeared, which are similar to a bank cash loan.
An installment loan is a fairly flexible product, the lender looks at your previous defaults is a characteristic of this loan. You can borrow both a low amount (e.g. $ 1,000) and a high amount (e.g. $ 15,000). The borrowed money and interest are given back in monthly installments. In this way, the loan can be repaid as well as several months or several years. Meanwhile, in the case of payday loans, this is not the case.
The instantaneous payday can be described as the queen of the non-bank loans market. Except that its splendor is slowly beginning to pass and it is thanks to installment loans. However, to explain why this happens, you must first characterize the payday loans.
It is worth starting with the very name “instant pay”, which explains the idea of this loan product well. Altom is a commitment incurred for a while. So we are dealing with a short-term loan. Usually, the money is borrowed for 15, 30 or 45 days, less often – for 60 days. Another characteristic feature of payday loans is low loan amounts (hence we are talking about low-value loans). As a rule, such a commitment is several hundred zlotys, but usually not more than 5 thousand. dollars. It is also characteristic of payday loans that you have to pay back the money once. With large amounts, this could be a problem, because you cannot divide your repayment into installments. Therefore, it is worth making sure before taking a payday loan whether we will be able to accumulate funds for its repayment.
Why is it better to choose installment loans?
There are usually no such repayment problems when choosing an installment loan. Its repayment form is one of the factors that makes it more beneficial than payday payday. Installments do not strain the household budget as much as a one-time payment of payday pay. In addition, the installment amount can be easily adapted to the borrower’s financial capacity. All you need to do is extend the repayment period to reduce the installment amount. However, if someone wants to pay back the loan faster and it is not a problem for him to pay a higher installment, he can choose the minimum available repayment period.
An installment loan will also be a better choice because you can borrow a much higher amount than with payday loans. Sometimes you need to finance a major renovation, car purchase, foreign vacation, etc. This requires a loan of at least $10,000 or more. Only installment loans provide such money. In addition, the installment commitment is usually much cheaper than the payday loan. In the case of the latter, the lender often gives up on thorough verification of the client, compensating for the high risk at high costs. When choosing a loan in installments, we borrow money cheaper.
How to choose an installment loan?
An installment loan is definitely more advantageous than a payday loan, but you should choose it carefully. You need to pay attention to various issues. First of all, it must be a legible offer. There must be no hidden costs, everything must be transparent. Fair rules are the basis. Then you can be sure that you borrow money from a reliable source. This is Rocinante, a company with Polish roots. It’s worth to bet on such lenders and look for opinions on them on the Internet.
An installment loan should also be selected for the amount you want to borrow. Usually, loan companies with installment commitments offer high loan amounts, but their maximum ceiling varies. Similarly, you need to pay attention to the maximum repayment period, if we want the lowest installment. It is also important that the entire loan process is not too long and the formalities too complicated. This, of course, does not mean that the best are companies that do not verify the customer at all. On the contrary, a cheaper and safer offer is usually preceded by a thorough verification. This is a responsible loan that protects the customer against being over-loaned.
How many installments to decide?
When choosing an installment loan, the customer can choose how many installments he will payback. Usually, a several-year repayment period is available. The choice of installments is important and should be the result of a well-thought-out decision. It is necessary to analyze not only the current but also the future financial situation. There may be events (e.g. random) that will reduce our ability to pay our liabilities. Therefore, it is better to immediately choose the installment level, which will not be too heavy for the household budget. It is better to have a margin of discretion in this respect. A lower installment means a longer repayment period. That is why it is also important to consider if, for example, you are planning to take out another loan for some time.
Installment loans – what formalities do you need to prepare for?
Borrowing money over the Internet is definitely more convenient than standing in queues at bank branches. It is also easier to get a loan in installments than to get a cash loan – the formalities are less complicated and can also be done online.
The loan process at Rocinante is transparent and consists of several stages:
- First, select the loan amount, then the repayment period (number of installments).
- A loan application must be completed, providing personal ID details, personal data, and income details. When it is the next loan from a given lender, it is usually enough to log in to the client’s panel without completing the application again.
- Identity verification is carried out for new customers (a special application is used at Rocinante).
- Wait for the loan decision.
- Money instantly reaches the customer.
An installment loan is definitely more beneficial than a payday loan because it is much easier and more convenient to pay it off thanks to the installment payment. For this, by choosing an installment offer, you can borrow a larger sum than with a payday loan. Not without significance is the fact that the money from the loan can be used for any purpose.