Does a loan from a bank, family, or non-banking institution pay off?

Caution is advisable when arranging a loan . After all – someone will lend you the money and at the agreed time will want it back. You must therefore choose a lender with whom you will feel safe.

Creditors are divided into three groups according to who oversees the fairness of their actions:

  • Companies controlled by CAB (banks)
  • Companies outside CAB control organized by the Czech Leasing and Finance Association (branded loan companies such as the Palliser family)
  • Non-CAB and CLFA entities (other)

 

The last group is the most risky and unfortunately also the largest. Companies and individuals falling within it may not comply with CLFA’s ethical rules . Their potential unfair practices are thus only solved by the Czech Trade Inspection Authority, but it is not possible to check them all.

Family, friends and acquaintances

consolidation loan

Although your loved ones belong to the 3rd group theoretically, we will not put them there. In a precarious financial situation, they are usually willing to help and do not burden you with interest. However, many people are prevented from being proud to admit to their family or friends that they are in financial trouble.

If you borrow from them, you run the risk of deteriorating your relationship when it comes to repayment problems . It may also happen that the lender suddenly needs the money himself and starts to push you back with a quick return.

  • Mostly without interest and there is always someone to lend you
  • Deterioration of relations, possible demand for early repayment and admission of financial distress

 

Banks

Banks

It is safe to borrow money from a large banking house that belongs to Group 1, but not everyone can do it. Banks thoroughly scrutinize each applicant and often reject their application.

Some also require applicants to be their clients – for example, you need to add a monthly account balance to your monthly payment.

  • The assurance that you will not fly a cheater
  • Strict terms of the loan

 

Branded non-banking institutions

Branded non-banking institutions

There are a huge number of non- banking institutions in the Czech Republic, and there are both proven companies with favorable terms and credit predators with contracts full of loopholes and hidden fees.

Therefore, it is always worth to choose only branded brands that fall under ČLFA and thus into the 2nd group.

  • Wide range and speed of negotiation
  • Risk of being hit by rogue creditors. All you have to do is choose well and it’s safe!

 

Companies not looking at the registers

consolidation loan

Representatives of this group should be avoided by anyone who does not want to get into trouble. While loans are easily and quickly available, lenders provide them, regardless of whether the applicant already has one.

Lending money to already indebted people is a clear indication that the provider is not solid. The registers were created to protect themselves from a debt trap and nobody should bypass them.

  • Fast handling and easy access
  • Regardless of the applicant’s needs and situation

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