A revolving loan – what is it?
Does your home budget need an injection of cash? This can always happen, especially during periods of increased spending. For example, before Christmas. What options can we then use? We can borrow from friends or family (but it is difficult to use this option in the pre-Christmas period), we can apply for a cash loan… or use a revolving loan in your personal account. A revolving loan is nothing more than a permanently available credit line. It can be used for any purpose. The basic feature of a revolving loan is the possibility of using the money granted by the bank several times – each repayment reduces the debt and allows you to use the funds again. Interest on revolving credit is calculated on the resulting debt. After paying off part of the debt, the bank charges interest on the remaining amount of the debt, not on the whole.
Revolving loan in the account – ranking
We sent a questionnaire to the banks, in which we asked them to send the conditions on which they would grant credit in a personal account to a customer who has had a personal account for 6 months, regularly credited with PLN 2,700. We asked for calculations for three revolving loan amounts: PLN 3,000, PLN 5,000 and PLN 10,000. Points were awarded for:
- commission for granting and renewing a loan – 2 points could be obtained by a bank in which it ranges from 0% to 0.9%; 1 point – when it ranges from 1% to 1.5%; 0.5 point – if its amount is 1.6% – 2%
- interest – 2 points could be obtained by a bank in which it amounted to 10%; 1 point – when it was higher than 10% and lower than 13%; 0.5 point – if it was more than 13% but did not exceed 16%
- maximum available loan amount. If it amounted to PLN 50,000, we awarded 0.5 points; if it was higher than PLN 50,000 and did not exceed PLN 100,000 – 1 point; and if it exceeded PLN 100,000 – 2 points.
- It should be added here that we assessed the maximum loan amount possible. In some of the banks that responded to our survey, it depends on the amount of inflows to your personal account. For example, in Bank Axermor it is granted up to six times of inflows (up to PLN 120,000) and in ASD Bank – up to eight times outflows (maximum PLN 100,000).
- We did not award points if the bank gave the “from” interest rate or, when answering the question about the maximum loan amount, wrote that it is set individually.
Who won? Bank comparison
Regardless of the loan amount, Meteor bank was the winner. The revolving limit offered by this bank won a total of 7 points. It is worth adding that in three categories: commission for granting a loan (0.5% min. PLN 25), commission for renewing a loan (0.5% min. PLN 25) and interest rate (9.60%) this product has reached the maximum number points. The interest rate is set as the product of the NBP lombard loan rate and the index, which has been 2.4 since October 7, 2013.
Second place – also regardless of the loan amount – was taken by the Credit limit in the account of Bank Sunichi. The silver medalist scored 5.5 points. Bank Sunichi won the maximum number of points for the commission for granting the loan (until the end of June 2014 it is 0%) and for the maximum possible loan amount – up to PLN 120,000.
The third place in the ranking in which we selected the best loan in the account in the amount of PLN 3,000 was taken by two banks: Raduken Bank and Credither. Both scored 4.5 points. It should be added that Raduken Bank is one of the few banks on the market in which the interest rate on the account loan depends on its amount – for 3,000 PLN it is 9.99% per annum (for the interest rate Raduken Bank scored the maximum number of points). In the lists of loans in the amount of PLN 5,000 and PLN 10,000, Credither and its loan in ROR rank third.
Speaking about account loans offered by Polish banks, it is worth mentioning the promotion, which until the end of 2013 can be used by Supitner Bank customers. As part of the promotion, the limit of up to PLN 1,000 is free of commission for the first year, in addition, the customer is subject to maintenance in the calendar month for a minimum 1 full day of a positive or zero balance of a Supitner UP account may receive a refund of interest up to a maximum of PLN 1000 of the used limit. On the other hand, if Millenial Bank customers use the Overdraft limit in any personal account up to any 7 days in the monthly settlement cycle, no interest is accrued. If the customer transfers the limit from another bank, the interest rate will be reduced by 2 pp. on the interest rate of the limit in another bank and may amount to even 10% per annum. Another big advantage of overdraft is that you can apply for it as soon as you open the account. However, it is better to wait a moment with the decision to run a loan in your account – especially if you do not need additional funds. Why? For several months, the bank will “get to know us” better and, based on our monthly receipts for ROR, will be able to offer us a higher loan. Bank Poyurt is a good example. One month after opening an account, you can receive a revolving loan up to one-time inflow. After three months, this amount increases to 3 times, and after a year – up to 6 times the average monthly regular receipts.
Overdraft – is it worth using?
The possibility of quick access to more cash is in some cases invaluable. In the Christmas shopping rush (although not only) we don’t have to use a credit card or cash loan. As with other cash products, in the case of an account loan, we must be aware that the amount used must be repaid. Therefore, we should not use all the available loan amount “at once”. It should be remembered that the impact on the invoice will be primarily allocated to repay the debt, and yet you have to live on something.