Loan and Credit Basic Differences

Who can grant a loan and who can grant a loan

A loan is definitely a broader concept than a loan:

  • The loan agreement can only be concluded with the bank.
  • You can enter into a loan agreement with an individual (e.g. your relative, friend) or with a loan company.

Are you thinking about a loan from a natural person? Find out what private loans are.

Regulations governing the institution of loans and credits

Regulations governing the institution of loans and credits

Both forms of commitment are extremely popular. Therefore, they were regulated in detail by law.

In the case of loans, art. 720§1 of the Civil Code:

Art. 720. § 1. The loan granting party undertakes through a loan agreement
transfer to a person taking a certain amount of money or things
marked only as to the species, and the recipient undertakes to return the same amount
money or the same amount of the same kind and quality.
§ 2. A loan agreement with a value exceeding one thousand zlotys requires
preservation of documentary form.

The loan is regulated by art. 69 of the Banking Law:

Art. 69. 1. Through a loan agreement, the bank undertakes to make available
the borrower for the time specified in the contract the amount of cash
for the purpose intended, and the borrower undertakes to use
from it under the conditions specified in the contract, refund the amount of credit used
together with interest on specified repayment dates and commission payment from
granted loan.

Subject of the loan and credit


The above provisions indicate that the loan agreement may apply to both money and all other things. The legislator specifies that with the loan agreement you must return the lender the same amount of money or items you have received (marked only as to the grade – i.e. the same, but not necessarily the same).

The loan agreement only applies to cash.

Purpose of the loan and purpose of the loan

Please note that in the case of a loan, the legislator does not specify what to do with the amount of money or item you have received. This means that you can usually spend the loan on whatever you want. Determining the purpose of the loan is not excluded (according to the principle of freely shaping the terms of the contract) – although this term is very rare.

According to the banking law – each loan must have a specific purpose. A good example is a mortgage – which can only be used to buy a particular property. However, there are some exceptions to this rule. Banks under the “loans” brand sell various financial products. The so-called consumer loans. In this case, you can also spend money on whatever you want.

Payment for credit and loan


The lender may (but does not have to) apply for remuneration for participating in the contract. We are talking about various interest rates and fees (regulated in detail in the Consumer Credit Act and the so-called anti-usury act). This means that you can get a free loan. It is also worth remembering that in some cases the borrower must pay tax on civil law transactions.

In this article you will learn more about the construction and taxation of a loan agreement.

The loan is always a paid contract. In addition, the regulations impose a number of requirements on banks as to the conditions for concluding such contracts. These entities are required to thoroughly examine the customer’s creditworthiness. In the case of mortgage loans – the consumer must have an appropriate level of own contribution (expressed as a percentage of the property value).

Loan agreement and loan agreement

Loan agreement and loan agreement

The loan agreement may be in oral or written form. The legislator indicates that in the case of contracts whose value does not exceed PLN 1,000 – an oral form may be used. However, in practice, the most common form is written form (or at least a written receipt of receipt of a loan title). This is primarily related to securing evidence for possible judicial proceedings.

The loan agreement always has a written form. Such contracts involve much larger amounts of money and are subject to many restrictive rules – so they must be in writing.

Virginia Gilbert

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