Payday loans and the limited risk model

Payday loans are called high-interest loans. Of course, using the services of a non-bank company may be more expensive than at a bank, but several things influence this state of affairs.

Limited risk model

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First of all, this is due to the fact that entrepreneurs operating in the loan industry create a loan portfolio from their own financial resources.

They are also not subject to the supervision of the Polish Financial Supervision Authority (Polish Financial Supervision Authority), and therefore, apart from the interest limit (no more than four times the ABC Lombard rate, currently 10%), they do not have any restrictions on fees and commissions.

Defects in the credit history

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This may change with the entry into force of the so-called Anti-Licensing Act, which provides for a reduction of fixed costs to 25 percent. loan value and variable cost up to 30% the amount of the liability. In addition, they do not use BIK databases, which allows them to grant obligations even to people with credit defects in their credit history.

This increases the likelihood that the customer will not be able to give them the money. These are not the only components of the limited risk model.

Payday loans with a limit on the first commitment

Payday loans with a limit on the first commitment

One of the solutions used in the limited risk model is limiting the amount of the first loan. This means that as a new customer we cannot immediately reach for the maximum amount available. Best Loan (USD 1,600) and Time credit, Express Loan (USD 1,500) are willing to give the most under the first free loan.

In addition, all listed loan companies will not charge any additional fees, which means that the commission and interest rate is 0%. As a result, we refund the same amount we received. Among lenders who do not offer a free loan, as much as USD 2,000 can be obtained from Cash Time, while Animal money offers USD 1,800. Women Cash offers new customers up to USD 1,500. 

Reliable repayment allows you to borrow more

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It is only the surrender of money within the prescribed period is the ticket to much higher amounts. The most, because of 4,000 USD on the second loan, we will find on Netcredit.pl. The final loan amount depends on your creditworthiness. Loyal customers receive discounts of 5–50% (the amount of the discount depends on the number of liabilities paid).

After giving the first payday loan, the second time we can reach 3000 USD. The repayment period is from 7 to 30 days. New Credit offers the same number of regular customers, however, the amount of the loan granted depends on our current financial standing and creditworthiness assessment.

On the other hand, Express Time and Time lend even USD 2,000 with a repayment period of 60 days to regular customers. The repayment is divided into two installments, payable every month.

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