Credit and loan – what is the difference between them?

The financial services market is characterized by great diversity, thanks to which it flexibly fits into the clients’ needs. Access to many forms of financial support is a great help, which is eagerly used by people in financial difficulties. At present, customers have at their disposal loans granted by banks and non-bank loans. What is the difference between these two products?

Credit – what is it?


Banks are institutions that enjoy considerable trust among customers. They grant loans for a specific purpose and also provide a wide range of financial services. A loan is nothing other than a transfer of funds by the bank to another entity on specific repayment terms. The loan agreement must be in writing and meet formal requirements such as:

  • data on both sides of the loan,
  • loan amount,
  • repayment date,
  • interest,
  • additional fees,
  • repayment terms,
  • signatures.

To obtain a loan, banks verify the customer’s creditworthiness, which depends on the decision to grant or refuse a loan. In addition, it must be remembered that the funds received must be intended for a specific purpose.

Loan – definition

A slightly more flexible product is a loan. It can be provided by loan companies as well as between natural persons. In addition, it does not have to be in monetary form, as tangible assets may also be the subject of the loan.

The loan agreement is constructed in almost the same way as for a loan. However, a loan is a slightly more loose product than a loan, which is why the funds obtained from it can be used in any way.

What is the difference between a loan and a loan?

What is the difference between a loan and a loan?

The most important difference is that, unlike a loan, credit is always given by banks. Although there are some similarities between them, there are definitely more differences. The table below summarizes the features of both financial products:

What is more profitable?

The choice of funding depends primarily on individual needs. To obtain a loan, strict conditions must be met, while a loan is a more flexible product. It can be used by people whose creditworthiness is not sufficient to receive a loan, and due to the variety of offers, you can find a loan on attractive repayment terms.

Looking for the best form of financing for yourself, it is worth analyzing the list of current offers. Based on the ranking you will be able to compare interest costs, repayment conditions and the granting of individual loans. This way you will choose the offer that best suits your needs.