What is the difference between a loan and a loan? This question is asked by many Poles. Let’s try to separate these two concepts. When is a loan no longer a loan? Who can grant a loan and who can grant a loan? There are a few differences, you can read about them in this article.
For most of us, credit and loan are the same concepts, and apart from pronunciation and spelling, we don’t see any difference. In reality, in colloquial language, it doesn’t matter what we call credit or loan. However, when going to a bank or other financial institution we should distinguish these two products. It seems to us that a cash loan and a cash loan are the same, but in reality, it is not.
Each of us can grant a loan – practically everyone
Of course, we must own the amount of money we are going to borrow. So anyone can become a lender, but there are rules. Loans can be concluded in any form, also in an oral form. If the loan amount exceeds USD 500, then a written agreement should be concluded. Such an agreement is governed by the provisions of the Civil Code. So we don’t have to be a bank to grant loans, but we also don’t have to go to the bank for a loan.
The situation is different for loans. Well, only one specific entity can grant a loan – it is a bank. Only a bank has this right. Importantly, the money he pays out in the form of a loan does not have to be his property as in the case of a loan.
These funds constitute a deposit that was obtained from other bank customers (e.g. from deposits). The loan agreement is not governed by civil law as in the case of loans, but by banking law.
When paying out a loan
The repayment date must always be indicated, which is not necessary for a loan. The loan is non-cash and is only a record on the invoice. The loan can be used for any purpose, while the loan is granted for a specific purpose.
If we use it for another, incompatible with the contract, the bank may require immediate repayment of the entire liability. The exceptions are consumer loans (e.g. cash loans), which can be used for any purpose, as well as business loans.
There are some costs/fees associated with granting the loan. The lender or bank charges a commission and interest on the capital. As for loans, they can be completely free, and therefore free. Until recently, the lending institutions were excessively using the option of any interest rate on the loan. Now its amount can be questioned by the court if it is too high from the point of view of social coexistence.