The non-bank payday loan still raises a lot of controversy, especially regarding interest and other charges associated with it. We explain what costs are associated with taking out a loan, what is their amount and what legal regulations are associated with it.
Fees related to non-bank loans
The total cost of a quick online loan consists not only of interest, but also other non-interest charges that the borrower must pay. I am talking here about: interest on the loan , i.e. the amount of contractual interest to be paid in connection with the borrowing of money; in accordance with art. 359 of the Civil Code, contractual interest on the loan may not be higher than four times the NBP lombard rate, i.e. 10%, penalty interest , i.e. the amount of fees related to delay in repayment of the contracted obligation; in accordance with art. 481 of the Civil Code, such penalty interest may not be greater than 14 percent. on an annual basis, non-interest costs , i.e. non-interest related fees, i.e. commission for granting a loan, insurance, preparation fee, service charge, etc .; in accordance with applicable law, the non-interest cost limit for online payday loans is 25%. total loan amount and 30% total loan value in annual terms, late payment fees , i.e. all related costs, including interest, which may not be higher than the maximum interest amount for the delay.
Contract rolling and statutory limits
Currently, internet payday service is strictly regulated by Polish law. All fees related to it are precisely limited. Restrictions in this matter also apply to contracts renewing a loan, i.e. contract rolling. Non-cash payments will be covered by the statutory limit if we defer repayment within 120 days of the first loan being paid. However, if a new loan agreement is signed before the end of the repayment of the liability within 120 days of receiving money, then the limits will apply based on the first loan, while all other fees and commissions from both agreements will be added together.
Instant payday via the internet is now safe for consumers
The Act of March 11, 2016, commonly known as “anti-usury” , precisely defines the total cost of a non-bank loan, protecting consumers from illegal practices of imposing horrendous and impossible to repay interest on borrowers. Therefore, customers of non-banking companies are protected by Polish law, and fast online loans are now a safe financial product.