There are really many details about which non-bank loans differ from loans. Recently, however, mortgage loans granted by parabanks have become more and more popular among borrowers. Let’s look at these products more closely.
Most non-bank loans are so-called payday loans: loans for relatively small amounts with a very high APRC. Such products are often not secured in any way – the lender evaluates its risk only on the basis of the credit history of the potential borrower and grants him a specific loan amount or refuses to pay depending on the information he receives. It is not often that loan companies ask for a certificate of earnings or confirm the fact of employing a borrower in the employing company. Against this background, the loan with mortgage security clearly stands out.
How does it work?
As a rule, the operation of mortgage loans should not depart too much from the procedures provided for loans, because the real estate must be mortgaged in Section IV of the Land and Mortgage Register, it must have a valuation, etc. However, there is a catch. Many lenders on their websites and in informants state that mortgage loans are compliant with the act on consumer credit. The whole problem is that only consumer loans are treated as consumer credit, the amount of which does not exceed PLN 80,000. Hence, it should be clearly asked: whether a given loan has a specified upper value of 80,000 or is not in line with the Consumer Credit Act – these two conditions at the same time can not be met. What is the conclusion? Even the fact that a loan for 80,000 borrower will be secured with a property worth several times higher.
Lighter than the bank
As usual, loan companies stand against the banks, offering more expensive but more convenient products. The loan itself can often be paid out within two days, and the borrower does not have to incur additional costs from the outset: loan preparation is often free, while in banks the preparation fees and various other costs incurred before the actual commitment is made must be repaid in cash. In this respect, it is certainly more convenient than in a bank.
Will it be cheaper?
Of course, compared to the interest rate of payday loans, the interest rate on loans secured by a mortgage is lower, but note that a similar situation occurs in the bank: cash loans or credit cards are more expensive than a mortgage, which does not mean that the bank earns more than on the latter. Most mortgage loan companies use a procedure similar to banks, and the interest rate depends on the type of property, loan period and loan amount.
Remains of payday loans
Of course, a non-bank loan with mortgage security is not simply a loan provided by a company other than a bank. Here you can also talk about mortgage breaks: loans are usually given for 3, 6, 9 or 12 months, however, just like in the case of classic payday loans, the repayment period can be extended. The amount of the loan granted is in most cases lower than at banks, because the parabanks decide to lend up to 40-50% of the value of the property, while the banks even 90%. It may not be a high value, but in combination with the ease of receiving a mortgage loan, this opportunity tempts many customers who have been loyal to banks so far.