Promissory note loans: if you can, avoid them!

At present, promissory note loans are among the most popular loan products. Both borrowers and lenders like them, and we’ll talk right away.

From the lender’s point of view, this is one of the most reliable and least risky forms of liability, for one simple reason. The enforceability of the payment of the bill of exchange is high and the creditor, therefore, has no reason to be overly concerned that he would not get his borrowed money back!

It is therefore not surprising that it is offered by virtually all credit market participants – from banks, through non-bank institutions to private lenders.

People who need to borrow or take loans

For people who need to borrow, loans conditional on a bill of exchange are attractive because they can be settled really quickly and without unnecessary bureaucratic delays.

You do not have to prove the amount of your income or submit bank statements, the creditor is not interested in the purpose for which you intend to use the borrowed funds and in most cases does not even look in the credit register to see if you are on the blacklist of defaulters. You don’t have to look for guarantors or set up your movable or immovable property.

You play the bait, so to speak, with bills

In this way, even the unemployed, non-earning entrepreneurs, or old-age or disabled pensioners can really get to quick money. Lenders will tell you that such a loan is also without any guarantee, but this is not entirely true!

In fact, you are guaranteed by a bill of exchange, and that turned into a change that means that you are actually potentially liable for all your private property! So watch out for this and before you decide on this type of loan, you’d better read our article to the end!

TIP: Apply for a loan through our online form. We only work with serious and fair non-banking companies that will not try unfair practices on you and you can really decide on the type of loan product that will be tailor-made for you and will not pose an unnecessarily high risk for you!

What exactly is a bill of exchange?

But to get to the root of the matter, let’s first clarify what the bill is! At first glance, someone who is unfamiliar with the loan segment may encourage this word to look into the dictionary of foreign words (despite the fact that it is a purely Slovak term), but the whole issue of bills of exchange is not as complex as at first glance. may seem.

A bill of exchange is security stating that the debtor undertakes to pay the creditor the agreed amount of money. The bill of exchange is always issued by the creditor, ie the entity that lends you money (we also talk about it as the owner of the bill of exchange). By signing in, you, as the borrower, confirm your commitment statement, which follows from the pre-agreed conditions written in the loan agreement.

In practice, this means about the fact that, as a debtor, you have signed a bill of exchange to declare that you will pay the creditor the agreed amount of money for the bill of exchange within a predetermined period and in a predetermined manner.

The bank, non-bank company, or private lender as a creditor thus has the right to pay this specified financial claim on your part as a debtor. It is clear: you have an obligation to pay and the creditor has the right to perform! There is no way to get out of it!

Watch out for blank bills of exchange!

So far, we are talking about a classic bill of exchange, which states how much and to whom you owe, the date of filling in the bill of exchange, its due date, method, and conditions of payment. It is mainly used for short-term loans for lower amounts. In other words, you borrow and undertake on the bill to pay the principal (that is, what you borrowed) to the creditor on a predetermined due date, plus interest and fees.

But now be careful! When providing various loan products, especially for loans from non-banking entities, a situation arises where you do not sign an ordinary but a so-called blank bill of exchange. And that poses a big risk for you!

Why? What is it all about? A blank bill of exchange is a bill of exchange in which the amount to be paid by the debtor is not filled in. The word bianko, which has its origin in Italian, meaning “white”, “pure” or “empty” speaks for itself in this case.

By signing in, you, as a debtor, voluntarily undertake to return an unspecified amount of money.

Only the creditor is entitled to enter the amount per blank bill of exchange under the pre-agreed conditions written in the loan agreement.

This means that if you guarantee a blank bill of exchange, you will sign a deed that does not state any amount of your future loan obligation. The amount is written into it by the creditor, for example, when you stop paying the agreed monthly installments, ie in the language of the financiers – you break the installment calendar.

You probably already know that it probably won’t be a small amount of money and…. don’t be wrong! By failing to repay and thereby violating the terms of the loan agreement, the bill becomes immediately due and the lender has the right to recover the remaining part of the loan from you, which has not yet been repaid.

He will write not only the amount of the principal with contractually agreed interest on the blank bill of exchange but also various fees and penalties for late payment. The result? The final amount of the receivable from the creditor usually exceeds the amount of the borrowed financial amount several times over.

TIP: If you can, you’d better look for loans that don’t use a promissory note to secure your repayment. There are always several ways to get the quick money you really need right now. If you apply for a loan online from us, the operator of one of our proven non-banking companies will contact you with a solid offer, which will solve your current lack of funds without unnecessary risks.

You don’t even know-how and you can start flying in a very unpleasant pain because of such a precarious situation. The borrowed thousand can grow in the worst case to a four-digit debt, which, if you have been in a bad financial position before, you will not be able to settle.

The courts decide on the claims from the bill of exchange in summary proceedings!

Given the creditor’s legitimate right to payment of this claim, the standard procedure is almost always followed in such a case. The creditor will apply to the court, which will issue a promissory note payment order without delay (which is a clear proof of your commitment to settle the debt without delay).

If you are unable to comply with this payment order due to your unhappy financial situation, an executor will take the stage, who will not cuddle with you and impose the execution on practically everything that the legal limits allow. And the execution proceedings are very fast!

But let’s not just scare you: if you are able to repay the loan honestly and strictly adhere to the repayment schedule, you don’t have to worry! As mentioned above, the lender cannot arbitrarily do what he wants with you just because you have signed him a blank bill of exchange.

It must comply with all the provisions agreed in the loan agreement. If it weren’t for that, it would be a different chapter and it would be usury.

You will not find this in the case of non-banking companies, but it is appropriate to remain vigilant in the case of private lenders. There are still many impostors who are able to abuse the plight of inexperienced, overconfident, or less intellectually advanced people for their own enrichment.