When applying for a bank loan or quick loan, pay attention to a number of parameters that affect their total cost. Among them is, among others interest, commission for granting a loan and additional fees – check how to choose the best loan.
Today we will look at interest rates. What is the maximum interest rate on the loan and credit? I checked what banks and non-bank institutions can afford.
The maximum interest rate on the loan
Interest on installment loans is usually higher than on bank loans. The reason is the lower amount and shorter loan repayment period. In addition, lenders may charge fees for the granting, launching or servicing of a product, which also results in a larger repayment amount.
The amendment to the Act on financial market supervision and the entry into force of the Anti-usury Act in 2016 unified the rules on the loan market and curtailed the activity of dishonest lenders. Under the new rules, the cost of the loan cannot be higher than 25% of the amount borrowed.
The legal basis determining the maximum amount of interest is the Civil Code.
Maximum loan interest rate
The aforementioned 10% also applies to loans – banks cannot therefore offer customers higher rates. When tracking cash loans offered by banks in Poland, we rarely come across such high interest rates. Usually it amounts to 4-8%, although of course the banks compensate for this with higher additional fees.
The amount of additional costs for the loan
The Anti-usury Act also sets maximum loan fees. You probably heard that many dishonest lenders led their borrowers to bankruptcy, imposing enormous additional costs on them – borrowed several hundred zlotys turned into gigantic amounts.
Currently, loan companies and banks must comply with the following restrictions:
- additional costs may not exceed 25% of the total borrowed amount,
- additional costs may not exceed 30% of the total loan amount on an annual basis,
- additional costs may not exceed 100% of the loan in the case of loans granted for several years.
Warning! Additional costs are not only interest but all additional fees associated with taking financing, except for interest.
Some non-bank companies offer free loans up to 30 days. These offers are a very attractive form of short-term financing but you should remember about timely repayment. Otherwise, the first free payday loan can cost us dearly.
APRC – Actual Annual Interest Rate
It is worth taking a look at the APRC, i.e. the Actual Annual Interest Rate. This is an important indicator that determines all the total costs of the loan – in percentage form. Banks have a statutory obligation to provide information about its amount, which is why it is worth paying attention to it. Check how to read APRC and find out the real cost of credit.
You already know the maximum interest rate on cash loans and credits. As I have already mentioned, interest is not the only selection criterion – note the number of additional costs that determine the total amount to be repaid. If in doubt, leave a message in the comment and I will be happy to help you choose a favorable loan offer.