What is a preferential loan and how to get it?

Are you wondering what exactly a preferential loan is? Do you want to know what distinguishes preferential loans from other types of loans and who can apply for a preferential loan? We have prepared for you a short guide on this issue.

Preferential loan: definition

Preferential loan: definition

Let’s start by explaining what a preferential loan is? What is necessary to mention when characterizing the concept of preferential loan? By this term, we define loans that are granted on, as the name implies, preferential terms. Moreover, it is worth remembering that the characteristic feature of preferential loans is the fact that they are intended for specific recipients. That is why, for example, there is a solution on the market, which is a preferential student loan or defective preferential loans for farmers. What distinguishes preferential loans from other banking products is the fact that they are financed to a certain extent by the state.

Who is the preferential loan for and what can it be used for?

Preferential loan interest ratePreferential loan interest rate

As mentioned above, preferential loans are intended for specific groups of recipients. For example, if we want to apply for a student loan, we must meet a number of specific requirements. It is similar in terms of the preferential loan for farmers – a disaster loan – for which a certain proportion of interest is regulated by the Agency for Restructuring and Modernization of Agriculture. There are different types of preferential loans, so the answer to the question: what can be spent on borrowed funds depends on which loan we use.

Preferential loan interest rate

Preferential loan interest rate

When wondering what distinguishes the preferential loan offered by banks and when analyzing the rules for granting preferential loans, one should also mention the issue of their interest rate. For some preferential loans, favorable conditions assume, for example, a low interest rate. Nevertheless, the interest rate on the loan is an individual matter.

Conditions for granting preferential loans

Conditions for granting preferential loans

To get a specific preferential loan you have to meet certain requirements. For example, when applying for a student loan, it is worth knowing that one of the criteria for granting it is the income threshold. What does it mean? The maximum income per person in a family cannot exceed a specific amount determined by the Minister of Science and Higher Education. What’s more, if no one can act as a guarantor, a person applying for a preferential student loan can apply for a guarantee by Bank Gospodarstwa Krajowego (certain conditions must be met) or the Agency for Restructuring and Modernization of Agriculture (this option, also if certain conditions, is intended for residents of rural areas).

Advantages and disadvantages of preferential loans

Advantages and disadvantages of preferential loans

We already know what a preferential loan means. We emphasized that the preferential loan terms are an individual issue. In that case: is it worth taking a preferential loan? There can be one answer – it depends, among other things, on your situation. Preferential loans in some cases allow the implementation of specific plans. For example, when taking a student loan, we get an extra financial injection that can be useful to meet basic needs. Unfortunately, studying, especially if it requires us to move to another city, can be a very heavy burden that we are not always able to cope with. Nevertheless, it should be remembered that every decision to take a loan is a serious commitment, therefore it must be carefully considered.

SUMMARY: preferential credit is, as the name implies, credit granted on preferential terms, the characteristic feature of which is that preferential loans are financed to a certain extent by the state. Examples of preferential loans? Student loan or disaster loan for farmers.