Although many people use the terms “credit” and “loan” interchangeably, these terms formally differ significantly, as do their legal effects. So what will be better for us – loan or credit? What to decide We suggest in the article below.
What is a loan?
To decide on a specific financial product – a loan or credit, you should first find out the differences and similarities between them. So what is the character of credit? First of all, it is a product reserved only for banks, which results in many economic and legal consequences and difficulties.
The loan agreement must be concluded in writing. Importantly, the contract must clearly specify the purpose of the loan, e.g. purchase of an apartment or building plot. It always costs to grant a loan – its price is commissions, interest and fees. If a loan agreement is signed, the money obtained does not automatically become the borrower’s funds. It is also good to know that a loan is always granted from the bank’s clients’ money, while in the case of loans, the lender must be the owner of the funds.
The advantage of the loan is the possibility of receiving a very high amount that will allow you to finance e.g. the purchase of an apartment, house, expensive car or construction plot. But beware – in order to receive a loan of interest to us, often a very high amount, we must meet certain conditions, above all, an appropriate amount of monthly earnings, and at the same time have an employment contract or regular income from our own business. In addition, the bank will always carefully check our credit history and bank account history, including regular payments and transfers to the account, as well as monthly expenses.
Thus, the fact that the bank is able to grant a high loan does not give any guarantee that we will realistically receive such an amount. If we don’t have enough creditworthiness, we can say goodbye to the amount we request. It is completely different with a quick installment loan.
Installment loan – what is it?
What is an installment loan? This type of financial product also includes several distinctive features. Importantly, an installment loan is much easier to obtain than the aforementioned loan. It is governed not by banking law, but by civil law, which is why a quick installment loan can be granted by an individual.
In the case of amounts below $ 500, the contract does not even have to be concluded in writing. A very important advantage of the loan is that it is not always payable! If the parties so agree, the granting of loans in installments does not have to be charged any additional amounts, e.g. commissions or interest. This is an undoubted advantage and advantage over the loan, for which you always have to pay extra.
Almost anyone can get a quick installment loan and can use it for any purpose. There is no need to specify what you plan to spend cash on. This type of loan will be perfect when we need smaller amounts, up to $ 10,000 – 15,000, e.g. for refurbishment of an apartment, purchase of home appliances and electronics, purchase of a used car or going on vacation. In this case, it will be much more profitable, and at the same time a more convenient form of financing, to take out loans in installments.
It’s a hassle-free and instant cash injection. Unlike credit, the money received automatically becomes the borrower’s property. Formalities are another feature that distinguishes an installment loan from a loan. For loans, they are kept to a minimum. Lenders do not require documented confirmations of regular income resulting, for example, from an employment contract or business activity.
Installment loan available to everyone
Therefore, one can conclude from the above arguments that installment loans are a financial product much more easily available to the average customer than bank loans. A quick installment loan can be taken very quickly and you can literally enjoy the cash after a dozen or even minutes. They do not require as much formalities and documents as loans from banking institutions.
Not an easy decision
It can be said that the answer to the question “loan or credit – What better to take?” Is not the easiest. It depends on several factors, including the financial and professional situation of the future borrower or borrower, as well as the urgency of the matter requiring additional cash.
If a person needs money “for”, without long waiting for a credit decision on the part of the bank, and at the same time does not want to incur very high costs of granting a loan in the form of a margin, interest or other fees, he can take advantage of the installment loan as we offer we, Anna Karenina, will certainly prove to be the best and most cost-effective solution.