[Bank Loans – These are loans provided by banks. These loans are supervised by the Czech National Bank. Obtaining a bank loan is somewhat difficult for the average citizen. Banks impose greater requirements on their customers in terms of collateral and adequate repayment ability. However, bank loans are more advantageous to customers because of better interest rates.

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Non-bank loans – These loans can be borrowed from various companies or from individuals or firms. These loans are supervised by the Czech State Inspection Service. It is not very difficult for clients to access these loans. Small loans can be made without a guarantor or proof of income. The disadvantages of these loans are the high interest rates and the need for timely repayment.

Loan types:

Consumer credit – This type of credit may or may not be guaranteed and is for the purchase of goods, automobiles, real estate, etc.


Mortgage – Called a mortgage, a mortgage of real estate is always used and the property being financed may be used for these purposes. There are two types of mortgages.

1. Purpose mortgage – Investment property

2. Non-purpose mortgage – Non-purpose loan

Escrow – used for short-term loans to finance a business [72

Investment credits – credits intended to finance investments under an investment plan

Operating credit Credit for continuous and repeated withdrawals by the customer up to a pre-agreed limit. The customer repays this short-term loan on a regular basis.

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Overdraft , or overdraft, allows customers to withdraw funds from their account even if they run out of funds in their account. This service is arranged in addition to a checking account. The amount of the overdraft is agreed upon in advance, i.e., the maximum amount of funds that can be withdrawn. The bank charges a fee and interest for this service.

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Whichever type of loan you choose, you need to consider the interest and APR (annual percentage rate). Some loans require collateral, and banks may check the creditworthiness of the customer. It is a good idea to think and discuss the various options with the bank advisor as well as the family beforehand.