What are the cash loans
Cash loans are one of the more risky forms of investment for the bank.
The most popular are three types of cash loans.
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The first of these are credit limits in the client’s current account, the second are credit cards, which are relatively similar to the limits on the account because both are characterized by the possibility of the client having funds up to a certain amount. The third type of cash loans are simply loans granted in the form of a transfer to the borrower’s account.
Overdraft limits and credit cards
Both in the case of credit and credit card limits, the bank gives its client the opportunity to use funds up to a certain amount, the limit set by the bank. Typically, the bank sets limits depending on the creditworthiness of the customer, usually customers who have higher income receive larger limits. In addition, these limits may vary depending on the bank. It is worth mentioning when credit limits and cards are examples of revolving cash loans. Usually, such loans are renewed every month throughout the year, and after the 12-month period has expired, the customer can extend the period for another year. Cash loans in this form are relatively expensive, which is associated with additional risk incurred by the bank. On the other hand, the customer may have an additional amount of money up to a certain limit and interest is charged on the amount he actually uses and on the period in which it is used, as is the case at least with all credit cards.
Cash loan in the form of a transfer.
Loans in the form of money transfer to the customer’s account are also not the cheapest. As is the case with cash loans, unlike non-cash loans, here too, money can be used for any purpose. Also, as in previous cases, you must meet certain criteria, the most important of which is having creditworthiness, in this case having a permanent source of income or some other kind of security. A good example of such a loan is student loan. In the case of a student loan, the money is transferred to the student’s account on a monthly basis, and the student can use it for any purpose. There must also be some collateral here, in the case of a student loan the parents can provide the collateral or if this is not possible the student can go to the economy bank. A student loan is also an example of one of the most preferential cash loans because it is co-financed by state funds and its interest rate may be lower than the interest rate on deposits.