Payday loan companies and banks

Among the financial institutions operating in Poland, we can distinguish payday loan companies, banks and parabanks. Despite the prevailing conviction, these terms differ significantly. Both banks and payday loan companies operate on the basis of specific provisions – respectively, the Banking Law and the Consumer Credit Act. In the event of their insolvency, only the owners bear the losses, so customers can feel safe. The situation is different in parabanks, that is private companies that operate on the basis of the Civil Code. In this case, at the time of insolvency, customers are exposed to the loss of some or all of their funds. What are the differences between payday loan companies, banks and pariz

Banks guarantee the safe lending?

In order to understand the concept of the bank, it is worth using the Act of 29 August 1997 on banking law – “The Bank is a legal person established in accordance with the provisions of laws, acting on the basis of permits authorizing to carry out banking activities that risk the funds entrusted with any repayable title. “

Therefore, a bank is a legal person that performs business activity on the basis of specific permits. It consists of on taking deposits, granting liabilities ( payday loans and credits ), and performing other activities specified by law.

Other activities that a bank may perform pursuant to the Banking Law include:

Other activities that a bank may perform pursuant to the Banking Law include:

  • keeping bank accounts,
  • issuing bank securities,
  • granting sureties,
  • check / promissory operations,
  • purchase / sale of monetary claims.

What is important, the bank is covered by both financial supervision and deposit guarantee. When the institution becomes insolvent, the Bank Guarantee Fund provides a return of cash.

Payday loan companies – why should you use their services?

At the beginning it is worth mentioning that, contrary to popular belief, payday loan companies are not parabanks. What’s more, both concepts have little in common, so using them interchangeably is a big mistake. So what are payday loan companies?
First of all, these institutions operate on the basis of the Act on consumer credit. Among other things, this means that interest accrued can not be more than four times the lombard payday loan rate, and the amount of APY payday loans must be reported in each information material.

Unlike payday loans, payday loan companies adhere to specific guidelines imposed in advance. In addition, these institutions provide payday loans online only with funds belonging to the owners and shareholders of the institution. This means that they do not take away money from customers, so the risk of losing money rests solely with the owner. Non-bank payday loans are therefore safe .

What is worth emphasizing is that payday loan companies, unlike banks, are much less rigorously evaluating a potential borrower. Some of them offer payday loans without BIK . Thanks to this, people with lower creditworthiness still have a chance to get a commitment.