In the meaning of colloquial language, credit and loan are considered to be interchangeable words. Both of these words have one meaning regarding the loan of a certain amount of money. However, it should be remembered that they differ significantly in reality. They differ in the type of contract and bring with them other economic and legal consequences.
The issue regarding loans is perceived as easier
Practically everyone can give them. Regardless of whether he is a natural person or an institution specializing in this. The only requirement to be met is to be the owner of the borrowed money. Matters related to loans are regulated by the provisions of the Civil Code.
The matter of loans is completely different. Only the banking institutions have the right to grant them, and the money earmarked for this purpose remains only in their possession. However, they are not their property because they come from the deposits of people who are their clients. Credit agreements are governed only by banking regulations.
As has been said, both cases present the issue of borrowing money. The loan agreement always contains the exact date of returning the amount borrowed. A loan agreement does not require such a requirement. The capital transferred on its basis becomes the property of the borrower immediately. The agreement contains all reservations, if there are none, the borrower has the full right to dispose of these funds, while the creditor has no right to intervene in the manner of their use. The essence of the loan agreement is that only cash is subject to a cash loan.
The loan is again quite different, because here the bank only gives the borrower a certain amount of money for a specified period of time. Here, cash does not become the property of the borrower. In addition, it is only cash-free cash, which is credited to your bank account. There is no physical possibility to receive a loan in the form of a cash loan. So when you withdraw money from an ATM using your card, you think you are getting a loan, not credit.
The loan is granted by banks on strictly defined terms
The first and most important of them is to provide a specific purpose for which the loan will be used. If the borrowed funds are used for a purpose other than the one declared, the bank has the right to demand repayment of the loan immediately. People using economic or consumer credit, which is mostly allocated to current expenses, have a slightly greater freedom.
Like everything else, credit also has a price. Its granting is associated with the collection of remuneration in the form of commissions as well as interest. It is calculated from the capital borrower transferred. As stated before, it is not owned by the bank, therefore it is important to generate profits in favor of the bank.
Loans are usually free. It is difficult to charge interest every time you borrow money. However, the parties can agree among themselves that the lender will receive some interest on the amount borrowed on account of the remuneration. A loan agreement between natural persons may be challenged by the court because it may be considered excessive from the point of view of social coexistence.
It should also be remembered that the loan agreement must always be concluded in writing, and in the case of a loan agreement, no form is required. However, the safest will be that when the amount of the loan exceeds PLN 500, it should be concluded in writing, because only in this way is it able to enforce any rights.
Therefore, making the right decision as to whether to borrow money better or to take out a loan remains an individual matter of every human being. For each of them, of course, one should, as best as possible, secure their own interests so as not to be cheated or stretched.