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In the collective social consciousness there is a conviction that momentary loans are horribly expensive, and when you take them out, you have to pay a huge amount of non-interest-bearing costs. In fact, this is not the case at all, as Polish law limits such costs and does not allow lenders to impose high fees on their customers. So how much will an average borrower pay for a moment?

Consumer Credit Act

A loan granted by a lending company is treated as a consumer credit in the light of the Consumer Credit Act of 12 May 2011, provided that its amount does not exceed PLN 255,550. Moments on the Internet are not granted for higher amounts and therefore each of them will meet the statutory definition of consumer credit. The rules for calculation of maximum interest and non-interest costs specified in the Act should be applied to it.

Maximum interest rate

Interest on consumer credit, i.e. also for a moment, cannot be higher than twice the statutory interest rate, equal to the sum of the reference rate of the National Bank of Poland increased by 3.5%.

Considering the fact that the NBP reference rate is currently 1.5%, when it is increased by 3.5 percentage points, we obtain a result of maximum interest, i.e. 10% per annum. This reduction in interest rates on consumer loans and credits of all kinds has been in force since 1 January 2016. Until 31 December 2015, the maximum contractual interest amounted to the equivalent of four times the NBP Lombard loan rate - 2.5% x4, i.e. 10% per annum. Little has changed in terms of the maximum annual percentage rate of consumer credit.

Limits of other costs related to the loan

Until recently, loan companies could in any way shape the amount of non-interest-bearing costs, which were related to granting momentary loans. This is not possible at present. Since 11 March 2016, the provisions of the Act on supervision over the financial market, which set the limit of non-pecuniary costs, have been in force in Poland.

When borrowing money from a loan company, the maximum amount of costs associated with the loan, which are not interest, may not be higher than 25% of the total amount of the loan and 30% of the variable amount, depending on the period for which the moment was taken. All non-interest bearing momentary costs connected with its granting and repayment may not exceed 100% of the total loan amount.