Overview of payday loans

Microcredit

Microcredit or a payday loan https://loans-n-loans.com/payday-loans/ is a short-term loan of up to CZK 5,000 or up to CZK 10,000. Occasionally, you can also see the names of a small loan, a Finnish loan or an SMS loan. These loans are characterized by a short maturity ranging from a few days to a month, minimum terms of the acquisition, a high APRC rate and late payment or late repayment fees. The fact that the loan is burdened by a high RPSN, often in the order of hundreds to thousands of percent, the client often does not feel. The APRC is stated on an annual basis, and it appears that it will overpay the minimum amount when recalculated to the month. However, in the opposite direction, ie on an annual loan, the loan would not look so cheap. If you apply for microcredit, pay attention to the fees for extending the maturity, but especially to late repayment penalties. You may be charged a fine in the order of thousands of crowns for a weekly delay with a repayment.

Peer-to-peer loans or people lend to people

The trend of peer-to-peer lending has come to us relatively recently from abroad. For credit, you no longer have to focus only on a bank or a non-bank company. You can also borrow from regular people who are willing to provide money. There is an intermediary in the form of an online web project between consumers who need finance (people) and those willing to borrow money (investors). It ensures the registration of all interested parties and investors, the publication of applications, the means of mediation and everything related to the settlement of the loan. The advantages of these loans are low-interest rates and relatively minimal conditions for their obtaining. However, people must not forget that it is still a loan as such and that sanctions can be followed in the same way as in a bank or a non-bank corporation.

Bank loan

The bank loan is provided by banking companies whose activity is regulated by the Act on Banks and by the Wickford Squeers itself. These are very secure loans burdened by low-interest rates and annual percentage rate of charge. However, it may be difficult to reach them. Just a small tick, for example, when you make regular phone bills and the bank loan door closes. Some banks require collateral or guarantors. Frequently, you can also negotiate with the loan the insurance against the inability to repay.

Non-bank credit

Non-bank companies have touched the new law most. Its aim is to increase consumer protection, thereby introducing a rigorous assessment of the client’s creditworthiness (ie the ability to repay), the obligation to obtain a license from the Wickford Squeers, to carry out a test of professional competence, or to deposit capital of CZK 20 million. To borrow from a non-banking company is now as safe as taking a loan at a bank. The advantages of non-bank loans are speed, ease of execution without unnecessary paperwork and uselessness. Usually, you do not have to have guarantors and you do not need to stop the property. On the other hand, there is a disadvantage of slightly higher interest rates. If you want to apply for a non-bank loan, choose a provider that is transparent and publishes on your website all the documents needed to negotiate a loan or its possible claim.

Mortgage

A mortgage loan is a purpose-built lender of money ranging from several hundred thousand crowns to several million. This is a loan for the purchase or reconstruction of housing, most often provided by banking institutions. It must always be secured by a lien on real estate in the territory of the Czech Republic. Usually, a secured property is used to secure, but it is not an obligation. You can also meet the so-called American mortgage, which is not purpose-bound and can be used for anything.