Loans against loans in practice


Loans against loans in practice

A person who needs cash has a lot to choose from. In addition to banks, there are also non-bank companies on the market that, in addition to traditional ones, also offer secured loans. What are these products and how do they work?

In fact, the financial product, which is a secured loan, includes several different solutions. Such loans are granted not only by loan companies, but also by banks and pawnshops.

Bank loans

Bank loans

A loan secured by the bank takes the form of, e.g. If the customer defaults, the creditor may take ownership of the premises or building pledged.

The most important conditions that must be met for a bank to grant us a loan against us are:

  1. Adequate creditworthiness
  2. The property right, which in the bank’s opinion must represent a certain value.

It is also possible to pledge a property that is only being bought. That’s what people taking out a home loan do.

Non-bank secured loan

Non-bank secured loan

The companies from the non-banking sector, like banks, grant loans against real estate. However, unlike institutions from the regulated sector, lending entities also accept movables, e.g. a car, a motorcycle, as collateral.

The second important difference concerns formalities. Requirements are lower for non-bank loans. Those who have received a refusal at the bank can also apply for such a loan. The downside of this solution, however, are higher costs.

A loan at a pawnshop

The category of secured loans also includes lombard loans. In this case, the money is received after the transfer of some valuable property. It can be e.g. jewelry, watch, household appliances, smartphone, tablet.

These items remain at the pawnshop until the loan is due, i.e. the debt repayment date. Their owner can collect them after settling the obligation. Otherwise, they become the property of the commission.

If you are looking for a loan for smaller amounts, you do not have to pledge your property. Through you can apply for a loan online and receive it on favorable terms within one day.

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