Loans for a promissory note may be granted between two private persons. Then the promissory note, which is a security, fulfills the credit function, that is, the guarantor of the loan.
Loans for a promissory note are currently quite rare. They were replaced by various types of bank loans, non-bank loans, social loans, which are held via special websites. However, promissory note loans still exist and when we need money, they are one of the options we can take advantage of.
Bill of exchange – what is it?
As we have already mentioned, a promissory note is a security and it is quite widely used. The bill of exchange is distinguished by the fact that the person’s signature on it is the basis and the reason for the promissory note of that person.
The promissory note secures the loan to the borrower, and thanks to it the borrower can receive quick cash. However, in addition to the credit function, it also has a recurring, refinancing and guarantee function. For example, a promissory note may be sold to another person, it may be used as a payment instrument.
Bill of exchange law
In Polish law, the rules for issuing and trading in bills of exchange are governed by the Act of 28 April 1936 Bills of Exchange Law (Journal of Laws of 2016, item 160).
This law specifies that the promissory note becomes a full-fledged document at the time the borrower signs it on it. Thus, the borrower assumes the obligation to repay the sum, which is recorded on the bill of exchange.
It is also worth pointing out that also a blank promissory note, ie without the loan amount entered, remains valid. However, you should pay special attention to this type of loans, because the lender can then enter a document much higher than the amount agreed upon orally.
Nomenclature of persons according to bill of exchange law:
• person issuing a promissory note – a trajectory
• the person repaying the loan – trasat
• recipient of a bill – remitent
How to take out a loan on a promissory note?
Loans granted on the promissory note are private loans, which are most often offered by private investors wishing to earn interest on loans. We can find their offers on various websites, including loan forums.
Borrowing on a promissory note, however, is not completely secure, as we have already pointed out, but nevertheless has its pluses, which are of great importance to many borrowers. We present them below.
Pros of a loan on a promissory note:
• the possibility of obtaining a loan for a very high sum, even up to PLN 100,000
• installment loan without checking in databases, for example BIK, BIG
• without the need to present income statements
• also for people with bailiff classes
• individually agreed loan rules
As we have already mentioned, the main defects of the loan on the bill of exchange are a danger, because we can find an investor who will not be reliable. It will require the signing of a blank promissory note, it will also want to receive additional fees, for example registration fees. Therefore, in a situation where we would like to use a loan secured by a promissory note, we must find a trustworthy partner.