A renewable loan is a financial product that has been prepared for people often using cash loans. We are talking here both about those people who have been allocated funds to regulate current liabilities, how to implement plans. In such cases it would be embarrassing to sign a contract – repay the loan – look for another offer – re-sign the contract, etc. The renewable loan significantly minimizes the formalities to be completed. What is worth knowing about renewable loans? What to look for when deciding on it?
A renewable loan – what is it?
A renewable loan was created on the model of a traditional revolving loan. It appeared on the Polish market a few years ago. Since then, more and more people are convinced of the financial product. The non-banking loan allows flexible, free use of funds granted by the non-bank company for so-called the loan line. Thus, it limits the formalities that accompany the re-engagement of another commitment. If it were not for a renewable loan, the customer would have to sign another loan agreement after paying off one commitment. Regular customers who have an account on the site of a given lender, although they have an easier process of applying for another loan (they do not need to, again, complete the form with personal data, make a verification transfer). However, they still have to complete certain formalities in order to receive financial support. A renewable loan effectively eliminates any nuisance and is a convenient form of long-term crediting of your plans and expenses.
Principles of the renewable loan operation
The rules accompanying revolving loans are governed by the provisions contained in the contract. Therefore, there is no single scheme for the operation of such a financial product. Each non-bank company can freely determine the parameters of the loan, the rules for its granting and the use of the funds granted. When considering using a renewable loan, it is worth considering the terms of the specific contract. The document should contain information about:
- the parties to the contract (data of the borrower and lender),
- definitions used in the contract – explanation of concepts,
- the subject of the contract – the amount of the loan, for what time it is granted (it can be an indefinite period, but it is not a permanent rule),
- the time and manner of payment by the lender,
- the interest rate of the loan,
- APRC (actual annual interest rate),
- the total amount to be paid by the borrower,
- the terms and date of repayment by the borrower,
- costs of a loan – what is made (eg fees, commissions, insurance),
- effects of late payment of the obligation by the borrower,
- the borrower’s option to withdraw from the contract,
- possibly to pay the obligation before the deadline,
- terms of termination of the contract,
- the possibility of changing the parameters of the loan,
- ways of complaint.
After the conclusion of a renewable loan agreement, the borrower receives a certain agreed amount of money. It can be used freely throughout the duration of the contract. Partial or full repayment of the liability enables the borrower to “borrow” again to the limit set in the agreement. The condition is, however, timely payment (eg until the 10th day of each month). Delays in repayment of liabilities may result in termination of the loan agreement by the lender and the commencement of the debt collection procedure.
Interest is accrued on the currently used amount. As a rule, the lender requires that every month the customer returns a certain amount, defined as the minimum.
Advantages of renewable loans
What are the advantages of a renewable loan? Is it worth using it? Here are the basic advantages of this financial product:
- the possibility of using money for a long time,
- no need to repay the entire liability in the short term,
- charging interest only on the actually used amount,
- the ability to change the parameters of the loan during the term of the contract.
Renewable loan – what to look for?
What to pay attention to when deciding on a renewable loan:
- regulations and conditions included in the contract,
- provisions regarding the rules for granting the loan,
- rules regarding the rules for calculating interest and possible additional fees,
- the APRC – the lower the loan, the more attractive the loan costs,
- the rules for assessing creditworthiness (eg loans without Retrodatabase ),
Which loan companies offer a revolving loan?
Where to look for a renewable loan? One of the lenders offering this specific type of financial product is Bankert. The maximum loan amount is PLN 5,000, with a contract duration of four months. To receive a renewable loan at Bankert, you must:
- be at least 18 years old (but not more than 70 years old),
- to live in the territory of Poland (have a registered address in Poland),
- to have Polish citizenship,
- have a personal bank account,
- submit a loan application,
- do not have negative entries in the Retrodatabase and QUA database.