A loan regardless of your credit history? In today’s article, we will characterize a loan for a promissory note. Who and who can give it to? What are its advantages and disadvantages? We will dispel all doubts in today’s text. First, however, it is worth answering the question: what exactly is a promissory note? rnsquared.com for further explanation
Bill or what?
A promissory note is a security which confirms a promissory note commitment. There is a signature on the promissory note issued by the issuer. Thus, it is a form of securing the receivables. The mechanism of the bill of exchange operation is quite simple. Two parties conclude a contract in which the promissory note promises to pay a certain amount within the time limit set by that party. The payment is to be made to the promissory creditor. Thanks to this valuable paper, the creditor can demand repayment in court.
There are several types of promissory note. One of them is a promissory note. In this case, the exhibitor undertakes to pay a specific sum at a specific place, time and specific person. To put it simply: the exhibitor promises to pay a specific sum on a certain date himself. The traced bill has a slightly different character. It is an unconditional payment order, in which the issuer determines who to pay for the bill of exchange. In this place, it is worth mentioning also a blank promissory note, in which there is a shortage of the bill of exchange, the place of payment or other, at least one element which should contain a promissory note.
A promissory note may be used as collateral for a loan, loan or when the person purchasing a good does not have the means to cover the claim. Let’s focus on the clue of this text, so on the first of these options.
Who is the loan for a promissory note for?
These loans concern private persons, so in practice everyone can give it. This is a particularly attractive option for a person who has a negative credit history and / or where the current financial situation makes it impossible to obtain a loan from a financial institution. In the case of a promissory loan, we do not have to enjoy an impeccable credit history or prove your current repayment capability, because the investor decides to borrow some amount on the bill of exchange depends only on him. If we are indebted, we have a negative entry in BIK / BIG and we have problems with the bailiff, none of these matters is an obstacle to borrowing a promissory note, as long as the investor is willing to lend us the amount.
What should a promissory note contain?
What follows in a logical manner from the previous paragraph, a loan for a promissory note is associated with fewer formalities than, for example, taking a loan from a bank. Unlike borrowing money from a financial institution, a loan under a promissory note may apply to any amount of money. The amount can also be used for any purpose. All details are set individually and there are no records that would specify these issues. Other information has been specified for this.
Although in this case the purpose of the loan and credit history are irrelevant, there are some restrictions that must be respected so that you can talk about a promissory loan at all. The basis for the operation of the promissory note is specified in the bill of exchange on April 28, 1936. It shows what elements should be on the bill of exchange. These include: the name “bill of exchange”, place and date of payment, creditor’s data, date and place of issuing the document, signature of the issuer, loan amount and the amount to be paid by the borrower.
What about security?
We already know that a loan for a promissory note can be obtained quickly, without checking the credit history, for any purpose and any sum. So where is the catch?
In the case of a bank loan or loan from any other financial institution, there is much more certainty that we will not be deceived. In the case of a loan for a promissory note, we must independently check whether the investor is reliable. A person looking for someone who gives her a loan on a promissory note is often tied up, because he can not get money from another source. However, you should not choose an investor in the dark and accept the first better proposal. An ideal option would be to check the opinions of others about the investor. If we do not have enough information about the person giving us the loan, let’s read at least what is on the bill of exchange. A promissory note agreement is a document on the basis of which an investor will demand repayment. So let’s pay attention to the sum that the investor lends us and what sum he expects when returning the loan.
Loans for a promissory note are undoubtedly a quick and easy way to get money, which is however much more risky than a traditional loan in a financial institution or a loan in a bank. Before tempting such a solution, it is worth analyzing all pros and cons. This way of improving the budget still raises a lot of controversy, which is why we should carefully read the opinions about the investor and read the information contained in the bill of exchange carefully.