Poles are always willing to borrow – both low and high amounts. In addition to payday loans, long-term loans paid in installments, which are granted by banks and loan companies, are very popular.
There is a fierce battle for customers on the loan market
This is particularly visible in the area of loans, whose repayment terms are longer than for popular payday loans, which in turn have repayment terms not exceeding 30 days. Of course, on the payday market, competition is also in full swing, but the vast majority of banks remain a passive observer. The situation is different with installment loans amounting to several thousand or several thousand dollars, where they compete with well-known non-bank companies. However, you can provocatively ask if this is really a competition, because the banks’ offer is very different compared to loan companies.
This difference is most visible in costs, which sometimes can be even several times higher in loan companies. Probably the vast majority of clients of such companies are aware of the fact that it is cheaper in banks, but they assume that they will not receive a loan there, or have already refused.
So what do these differences in specific numbers look like?
Let’s hypothetically borrow USD 4,000 a year and compare the installments. Their amount in 11 selected banks ranges from about 343 to 421 USD. Even when choosing a more expensive offer, you can’t complain too much. How do payday loans pay in installments? Very different, but definitely more expensive; in the most popular non-bank company mentioned above, such a loan means an installment of USD 451.69 (data as of September 14, 2015), however, we will also find offers in which the installment is over USD 600, which means that we will give back a total of almost twice the amount.
So what can you sum up the situation? If someone is considering taking out a loan, it is worth trying to apply for it at the bank, even if one or the other refuses. If the borrower decides in turn to a loan company, let them necessarily compare offers – it will definitely save money. Perhaps the conditions will change in favor of customers with the entry into force of the amendment to the Anti-usury Act, but this may be a premature assumption. The more so because the past has shown many times, the law can be circumvented in various ways.