A cash loan is one of the most popular ways to raise additional funds. A minimum of formalities and a quick credit decision are its greatest advantages
Cash loan – read before you take
Before we start applying for a loan, let’s get acquainted with the conditions that we must meet to receive it. Let’s compare offers in several different banks to choose the one that best suits our needs. Instead of browsing them yourself, we can use credit comparison websites and calculators available on the web. Which loan you choose should take into account several factors:
- purpose – depending on what we need financial resources for, let’s apply for such a loan; precise definition of what the money will be spent on (eg buying a car) will help us estimate exactly what amount we need
- financial possibilities – every obligation has to be repaid, this also applies to loans; you should not borrow more than we need or we can give back;
When choosing a cash loan, let’s pay attention to the costs associated with it. The most common ones include interest rate, commission and preparation fees. The lower the fees are, the better for us as future borrowers.
This is a basic condition that we must meet in order to receive a cash loan. Creditworthiness is the ability to repay the loan (including interest) within the time limit specified in the contract. When analyzing creditworthiness, the bank divides it into quantitative and qualitative parts. The former is related to the financial situation of the borrower. The bank will check its income, monthly maintenance costs and current debts. Importantly, the income does not have to come from an employment contract. Also included are those obtained under a mandate contract or a specific task contract. It is worth checking what types of income a financial institution accepts before we apply for a loan.In turn, the debt consists of currently repaid liabilities, serviced credit cards, used limits and guaranteed loans.
Qualitative analysis concerns the borrower’s record characteristics. These are parameters such as:
- marital status
- form of employment
- certainty of employment
- permanent residence
- position held
- number of dependents.
The creditworthiness can be checked independently using calculators available in the network, but the obtained result is only indicative.
The second factor taken into account by the bank is creditworthiness. This is the story of our commitments. It applies to both repaid and currently serviced debts. The bank will check what debts we have in our account and whether we are reliable payers. If we have paid all our liabilities on time, we can be confident about our credit history.
A good credit history is a signal to the bank that we are reliable customers and that you can give us a loan. Before we apply for a cash loan, let’s check our history at the Credit Information Bureau. We can download the BIK report on your subject once every six months for free. Importantly, this is the same report that the financial institution will receive about us.
Applying for a cash loan requires that you provide certain documents. Which of them we will have to attach to the application depends on the specific bank. Contrary to appearances, the formalities that we must complete are not so much. To receive a cash loan, usually documents such as:
Document confirming identity – ie driving license, passport or ID card; as the name implies, it is necessary for the bank to confirm that we are actually the people we claim to be; in the credit form we have to enter the same data that appears on the attached document;
Statement of earnings – thanks to it, the bank will be able to estimate whether we can afford to pay the liability that we are currently entering into; receiving a steady, regular income (preferably if its source is a permanent employment contract) is one of the most important conditions that we must meet as potential borrowers; it is also the basis for calculating our creditworthiness.
We receive an income certificate from the employer (with his signature he confirms that we actually earn as much as we have declared). If we receive a pension instead of an income certificate, we show the last pension certificate. It is enough to confirm our status.
The bank may also ask for a bank statement for the last three months. This is to confirm that our account regularly receives certain funds. It is also proof that we are financially stable and that we can cope with the repayment of cash loan. If you do not want to show an income certificate, you can opt for a loan based on the statement. Then we declare how much we earn.
Cash loan – how much do you have to earn to get it?
We can apply for a cash loan regardless of how much we earn. It is good to know that each loan application is considered individually. What’s more, exactly on what terms will the bank grant us a loan related to its financial policy. In practice, this means that our creditworthiness may differ at different banks. More important than the amount of earnings are regular receipts, form of employment and adequate creditworthiness. Someone with low earnings but no other obligations is much more likely to get a loan than someone who earns well, but is currently paying back some debts (especially if he doesn’t do it on time).
Obviously, to receive a cash loan, we must be of legal age and have full legal capacity. It is also necessary to have no entry in the register of debtors. If we are listed in one of the popular databases, our loan application will be rejected. When you apply for a cash loan for a high amount, you may need additional security and consent from your spouse. In a situation where property separation has been established between the spouses, it is worth preparing a document that will confirm this fact.
What conditions must be met to get a cash loan – summary
In the era of customer struggle, banks minimize the formalities that we need to complete to get a cash loan. This does not mean, however, that you can reach for such a financial product without reflection. Before we complete the application, let’s check our creditworthiness and see if we can afford it. Let’s prepare all documents in advance, which will shorten the duration of the entire procedure. Let’s also build a positive credit history and be solid payers. If we present ourselves as reliable and credible customers, we will increase our chances of getting a loan.