Until recently, the debit on the account aroused poor associations. Today, we look at the solution with a much more favorable eye. So should debit in a bank account be treated as an alternative to a quick loan? Let’s check when to choose each of these solutions.
Although some banks are already able to guarantee something like a quick loan, this type of offer still remains the domain of non-bank companies. It is in these second institutions that we can easily get money without unnecessary formalities, ideal creditworthiness or above average income. In the bank, however, the credit procedure is usually more complicated. But if we have a bank account that supplies regular income, then in the case of temporary financial difficulties, we can get money from debit. What’s more, in this case, cash is received practically immediately and we do not have to fill in any applications. This solution therefore seems quite attractive.
Loan and debit – what’s going on?
However, before we eagerly reach for the funds available under the debit, it is worth checking where the funds came from and how the debt is paid. Nobody, after all, has no doubt that the money received in this way will have to be given back.
Debit – small amounts, low cost
The debit is in fact the amount that the bank provides to the holders of savings and settlement accounts in the form of a revolving loan. The amount of the granted limit depends mainly on our income and time of cooperation with a given bank.We can use the funds granted as part of the debit whenever you run out of money in your account. What’s more, it is not a one-time help. You do not have to use the debit all at once – you can reach for money as often as you need – until you reach the limit of allocated funds.
And what is the repayment of such an overdraft? Usually, all debts to your account (eg monthly pay) are counted towards your debt. This happens until we completely settle your debit. However, it is worth remembering that we have a certain period of time to repay such a commitment (depending on the bank’s policy).
What’s more, interest will be charged for the period in which we used funds from the debit . Of course, these interest will only be counted on the amount of debit we used. Currently, the interest rate on which banks are guided is about 10% -20%. When we pay back the entire debit, it will be automatically renewed, and we will be able to use the funds made available within the limit.
Loan – larger amounts, more time to repay
A loan is a solution that requires a bit more of a west. First of all, we need all the offers on the market, choose the one that best meets our needs, secondly submit the application and complete all formalities, and thirdly – keep our fingers crossed so that the lender will consider our application positively. In non-bank companies, all formalities have been kept to a minimum, which is why the whole process usually takes about a dozen or so minutes.
Even so, the quickest way to get cash is still the debit on your account. What’s more, we’re never 100% sure that the lender will approve our application and give us a loan. In the case of debit, the case is clear from the beginning.
However, if we take into account the amount of the liability, the loans give much better opportunities than the debit . Currently, non-bank companies are willing to borrow up to several thousand and repayment period calculated in years. The debit possibilities are closed in just a few thousand, and repayment is often required after about 30 days.
In addition, in the case of a debit, we have a certain limit of available funds, which will be renewed only when the funds will be transferred to the account. In the case of loans, we can incur several liabilities simultaneously in different companies . Thanks to this, we get a much larger cash injection than it can offer us in the form of a debit.
Summing up the previous considerations, we can conclude that both the debit and the loan have their weaknesses. The choice of the right product will therefore depend on the needs we are expressing at the moment,
When is it worth using a loan?
It is worth reaching for a non-bank loan if:
- we need a lot of cash,
- we want to spread the repayment of the liability for a longer period,
- we do not have regular income,
- we do not want the bank to know about our obligations,
When is the better way to choose an account debit?
The debit will be an appropriate solution if:
- we want to have instant access to extra cash,
- we will need additional funds in the amount of up to several thousand zlotys,
- we receive regular receipts to your account,
- we want the lowest commitment costs
It is difficult to give an unambiguous answer to a loan or debit question. It all depends on our current financial situation. So if we face such a dilemma, it is worth answering the question of how much cash support we need and what funds from the monthly budget we can spend on repayment. Next, let’s check what offer of the debit the bank has prepared for our account. It may turn out that the offer will not meet our expectations. Having a ROR does not mean automatic access to debit. In this case, the loan may be the only solution available.
Compare loans in installments and choose the solution that’s right for you!