Cash and mortgage loans, differences between offers
Cash loans and mortgages are two financial offers that enjoy the greatest interest among all customers who use the services of banks operating on the domestic market. What makes these two loans different? What makes them so popular? What connects them and what divides them? We will try to answer these few questions that borrowers often ask themselves in this article.
A cash loan is an offer that guarantees the payment of money to the customer’s account that will be allocated for any purpose. This is a great advantage and a characteristic feature of a cash loan because the vast majority of loans granted in banks are intentional.
A cash loan is often compared to payday loans
This service, allows you to increase your budget without having to specify the purpose of the loan. However, unlike a para bank, a bank granting a consumer loan verifies the borrower thoroughly, making sure that the loan amount will be repayable to him, without having to make major sacrifices.
Cash loan not only offers money, whatever you want but also provides a very quick credit decision and the possibility of receiving cash in one day, which in the case of debts offered by banks is a great convenience and a huge advantage.
You can apply for a cash loan electronically, and regular customers of specific institutions can count on receiving money without having to go to a bank, only through access to Electronic Luleness. By running a personal account at the selected bank, you may notice that the institution, based on your regular income, is able to offer a loan from the level of logging into the account. This is a simplification that cannot be experienced with other liabilities available directly at banks.
A mortgage is an offer that undoubtedly attracts many customers who are determined on a specific debt in order to buy an apartment or house. It is a loan that we can specify as intentional, and the borrower, before receiving credit approval, must take into account numerous formalities that will apply not only to his person but also to real estate that will become collateral for the bank until all debt is repaid.
In contrast to a cash loan, the mortgage is associated with a long waiting period for the bank’s decision, and the entire process of obtaining credit approval involves engaging formalities and the need to provide many documents that will be necessary for the bank before issuing a loan decision.
Due to the high amount of debt, the mortgage always offers a long repayment period, but the bank additionally secures such a liability, requiring the borrower to make an own contribution, which according to current Luluym law amounts to 20% of the property value. People who, however, want to apply for a mortgage, but do not have such high savings, can take advantage of the low down payment insurance, which allows you to apply for a loan, having only 10% of the value of the house or apartment.
Although until recently there was no such possibility, more and more banks are providing a mortgage for a single, which makes it easier to obtain funds to fulfill the dream of their own apartment, also for people who have not yet started a family. This is a great example of the fact that banks are increasingly willing to pay attention to the expectations of their customers and try to adjust the conditions of the products offered.
What connects cash loan and mortgage
Although seemingly cash and mortgage loans have virtually nothing in common, there are points that are common to both of these debts. Remember that these are services provided by financial institutions that are guided by established rights, which obliges them to conditions unchanging from the type of service provided. As common points of mortgage and cash loan we can mention:
Differences between a cash loan and a mortgage loan
Everyone knows that cash loans and mortgages are targeted at completely different consumers. But what exactly distinguishes each of these services, how do they differ so that they are so characteristic among other debts available in banks?
A mortgage loan is associated with the fact that credit funds are not paid to the borrower, but to the developer selling the property. This is a huge difference between the cash loan, which is fully paid out to the applicant’s account.
A flat or house bought with the help of a mortgage becomes collateral for the loan, which allows the bank to reduce its liability costs. In addition, the borrower often has to take out a life insurance policy and also take out real estate insurance against random events.
The cash loan allows, but does not require loan insurance.
The cash loan is often dedicated to all interested parties, including regular customers of the bank, as well as people who have not had the opportunity to use the services of an institution before. Mortgage loans often involve the need to set up a personal account with the bank.
You can get a cash loan based on a personal income statement, which is not possible with a mortgage.
A mortgage can only be used for a specific purpose, while a cash loan will work in every situation, depending on the borrower’s needs.
The mortgage involves a long process of applying for credit approval, and the conclusion of the contract is often preceded by several weeks of completing all formalities. Cash loan guarantees almost instant credit decision and access to money in one day.