Ideal creditworthiness is the privilege of the few. So what if lenders keep sending us back? Many are looking for alternative methods of obtaining cash and in exchange for a quick loan they sign a promissory note. However, this often brings something completely different to expecting benefits.
The non-banking market has undergone significant changes recently. The costs of loans have been regulated, non-bank companies must operate according to strictly defined rules, and the client of such institutions may finally feel safe. Loan companies would have long ceased to be an alternative to banks that only consumers with low creditworthiness use.
The classic client of such institutions is currently a person with a stable financial situation who chooses non-bank solutions mainly due to the quick option of obtaining cash while reducing formalities to a minimum. Loan companies, in turn, attach much greater importance to assessing the client’s financial capabilities and provide loan support only when they are sure that the potential commitment will not be an excessive burden on the applicant.
Even though the non-banking sector has become more pro-consumer, consumers still need to be vigilant and scanned the potential lender well before applying for a loan. There are still pseudo loan companies on the market that have nothing to do with the above principles. Their main goal is not to support the client, but to extort from the client the largest amount possible.
Such “institutions” mainly target indebted persons, grasping at every possibility of borrowing money. In return for the loan, they expect horrendously high interest, additional fees, mortgage or signing a promissory note. Unfortunately, such requirements instead of the expected rescue will only expose us to the risk of losing the remainder of our assets. What’s more, of all the above-mentioned collateral it is the promissory note – although at first glance the least harmful – can bring the largest losses to the client.
Bill of exchange in practice
From a legal point of view, a promissory note is a security on the basis of which a lender can demand from the debtor repayment of an obligation, and in the absence of such payment, assert their rights in court and enforcement. Each such document should take the written form and contain the following elements:
- the name “promissory note” placed at the very beginning of the document,
- date and place of signing,
- date and place of repayment,
- lender details,
- payer’s details,
- signature of the payer.
The borrower should also pay attention that the amount on the bill of exchange is adequate to the loan actually paid out. If the lender enters the court and justifies his claim with a promissory note, the court will not examine the correctness of the amount provided, but will only check whether all formal requirements as to the appearance of such a document have been met. If the promissory note does not raise any objections, the customer will receive a repayment order for the amount equal to its value.
The dark side of the loan is a promissory note
Although the terms of the promissory note are strictly defined, this document provides pseudo lenders with an excellent field of abuse. In many cases, the amount entered on the bill of exchange several times exceeds the value of the loan, and therefore the customer having doubts finds out that this fact does not really mean anything.
Moreover, in the environment of suspicious loans, so-called blank bills of exchange. These documents are presented to the borrower for signature without a clear amount. However, the lender can then enter any amount and demand a refund in accordance with the law. Of course, in such cases, the borrower is convinced of honesty and ensures that the bill of exchange will have exactly the same value as the loan granted. Unfortunately, the stories of people who believe in such words prove that it is usually quite different.
It cannot be denied that pseudo lenders rely on the clients’ ignorance of bills of exchange. And when there is an urgent need to get cash, we often turn a blind eye to things that arouse our suspicions.
Loan promissory note – better avoid it!
Before we take out any loan, we need to know exactly what amount and when to pay back. Awareness of the cost of the loan and the time to repay it will allow us to assess whether the commitment does not exceed our financial capabilities. Only such an action allows you to borrow safely. There is no such guarantee in the case of loans for bills of exchange granted by the methods described above. Therefore, it is better to approach them with a high degree of caution and if possible, first use all other options, e.g. loans granted online.