To take a loan or not to take a loan – that is the question. A significant proportion of Poles already have this decision behind them, and you probably are just standing in front of her since you are here. Choosing the first loan is difficult, which you probably know perfectly well. Ignorance of the banking product may lead to loss. Check what you need to know before you get your first loan.
Living costs in Poland are high, as opposed to earnings, the amount of which often leaves much to be desired. Life situation even forces some to reach for a cash loan.
After all, such a loan is the best way to finance a larger purchase such as a car. A mortgage is better for building a house or buying an apartment.
When is it worth taking the first loan?
You can’t hide that Poles like to get into debt. According to KRD data, the debt of young Poles is already over $ 535 million. Cash loans are one of the most frequently chosen types of loans. The main reason for this is definitely less formalities than in the case of a mortgage.
The lack of specific requirements related to applying for a loan and the possibility of spending money for any purpose is also of considerable importance. Probably now you are wondering when you can take the first loan. The person applying for the first loan must be of legal age, not earlier than before the age of 18.
Also check: Special purpose loan – what is it and what is it for?
If we have a lot of expenses that we cannot cover ourselves, then a loan is always a good solution, provided that we have absolute certainty of its timely repayment. Otherwise, it’s worth pausing and trying to find a different solution to your problem.
How do you choose your first loan?
For those who have only been in contact with credit for the first time, choosing the best offer can be a real challenge. How to get the first loan? What to look for when looking at credit offers to choose the best one and not regret it later?
Compare individual loan parameters with each other. The most important are:
- loan amount,
- loan period,
- interest rate,
- commission for granting a loan,
- credit insurance,
- early repayment fees,
- APRC amount (includes all costs).
Pay attention to additional benefits resulting from using a given credit offer. Do not miss the way of reasoning – the easier it is, the shorter the time to wait for money.
And remember that the APRC comparison is credible only if you consider offers with identical parameters, otherwise it doesn’t make much sense.
Where is the best place to apply for a first loan?
The ranking of cash loans can be helpful in choosing the first loan. In the blink of an eye, it will allow you to find the answer to the question in which bank the first loan pays off the most. Each ranking is updated on a regular basis, so you can only find loan offers that banks actually have in their offers.
Attractive loan conditions are offered by Lite Lender, where you can take a loan for 20,000 $ with a 48-month repayment period. The total sum of interest throughout the loan period will amount to $ 3,300.28. Cream Bank has another proposition for us under the same conditions, except that in this case the sum of interest will be $ 816.93 higher than at Lite Lender.
First loan – what are the banks’ requirements?
Now that you know where to get your first loan, you also need to know how to do it. Let’s start with the fact that you need an ID card to get a loan. In order to confirm solvency and analyze the risk associated with granting a loan to a given bank, banks also require an income certificate.
Sometimes, instead of an income certificate, banks ask for a bank statement, where it is black and white, what income we have on the account. Unfortunately, people employed for an indefinite period, for a trial period or on the basis of another contract may have a big problem getting a first loan.
This does not mean, however, that clients who have retired or have no pension have no chance of a loan – they have, however, the required documents in their case are different than for working people.
Some banks refrain from granting loans to very young people and put 25 as the minimum age. The bad news is that the amount of the first loan will not be high. The main reason for this is the lack of credit history.
What should you know before taking your first loan?
As has already been mentioned, credit history affects creditworthiness, that is, the ability to repay a liability with interest. In the context of creditworthiness, income, which should be as high as possible and the source of remuneration, is also important, preferably as if it were legal (e.g. employment contract or mandate contract).
If you have not taken any loans so far, you are thinking about a mortgage for an apartment and your credit rating is low, you probably don’t have a chance for a high loan. To pave the way for a loan for the desired amount, you need to increase your credit standing.
Creditworthiness and first loan
Banks always assess the creditworthiness of a potential customer and there are no exceptions to this, even if he is applying for his first loan. Creditworthiness is calculated on the basis of several different factors, including the already mentioned credit history and earnings. Only what to do if the credit standing is too low? Get rid of debts, find a better job and learn to save.
If you have low credit standing, forget about paying back the loan in decreasing installments – only the option with equal installments will be available to you. To increase your chances of getting the loan you want, apply with your co-borrower. Then the bank will look at him more favorably.
Credit history and first loan
The first loan without a credit history can be difficult to get. If you want to convince a bank that giving you a loan is a good idea, you need to build a solid credit history. Thanks to it, you will gain the image of a reliable borrower and convince the bank of your diligence.
There are many ways to build a credit history. We present the 3 best in our opinion:
- Installment purchases. All you have to do is buy home electronics or household appliances and spread the repayment into several installments that are convenient for us. You just have to remember to pay the installments on time.
- First loan for a small amount. Even if you want a much larger amount, you need to be patient. Start by taking a small payday payday and be sure to return it within the time limit specified in the contract. Non-bank companies have in their offers free offers for new customers, so if you choose one, you will give exactly as much as you borrowed.
- Overdraft on the account. Apply for an overdraft on the account that you won’t even have to use. The very creation of an overdraft will be reflected in the history of the Credit Information Bureau as a current credit commitment.
Following these 3 tips will clearly increase your chances of getting a first loan.
What does the first loan agreement look like?
Signing a loan agreement is a condition for receiving money. There are several ways to get a first loan, so there are different ways to sign a loan agreement.
The first loan can be taken online, by phone or traditionally at a bank branch. In each case, the application procedure is the same:
- Filling out the loan application.
- Creditworthiness assessment.
- Issue of a credit decision.
- Withdraw funds.
Remember to always read the contract before signing. If any issues are unclear to you, be sure to ask a bank employee about them. Thanks to this you will avoid unpleasant surprises that could appear at the stage of loan repayment.
What to do if your bank doesn’t give you your first loan?
Banks have the right to reject an application for a loan. Under current regulations, they must then state the reason for such a decision. The most common reasons for not granting a loan include:
- short work experience,
- low income
- too many commitments
- negative credit history or lack thereof,
The bank doesn’t want to grant you a loan? Do not give up! Loan companies are happy to provide you with financial support. If you have not used their help so far, you will receive the first loan for free. Due to the lack of costs for small amounts, payday loans are even better than loans.
There are also less formalities associated with loans, so you can get money almost instantly. Diligent repayment of such a loan will open your way to further loans and credits.