When it comes to borrowing money, there are many credit options available in 2025. Each option has its own benefits and drawbacks. Some are better for emergencies, others for large purchases, and some for specific groups of people. In this guide, we’ll explain eight popular types of credit in simple language to help you make the best decision for your financial situation.
Let’s walk through each one:
1. Pożyczka osobista
Interest Rate (APR): 6% – 36% (Average ~12.36%)
Repayment Term: 1 to 7 years
Credit Score Needed: Medium to High
Collateral Required? ❌ No
Best For: Debt consolidation, medical bills, large purchases
Key Drawbacks: May include fees (origination), fixed payments can be rigid
A personal loan is a great option when you need a specific amount of money for a one-time need. It could be for paying off high-interest credit cards (this is called debt consolidation), covering a medical emergency, or even renovating your home.
The loan is paid out in one lump sum, and you pay it back in equal monthly payments with a fixed interest rate. This makes your budgeting easier, because your payment stays the same every month.
But be careful: some lenders charge an upfront fee (called an origination fee), and once you agree to a monthly payment, you can’t reduce it later if your budget changes. So make sure the monthly cost fits your lifestyle.
2. Karta kredytowa
Interest Rate (APR): 18% – 30% (Average ~20.09%)
Repayment Term: Flexible (revolving)
Credit Score Needed: Medium to High
Collateral Required? ❌ No
Best For: Daily expenses, short-term needs
Key Drawbacks: High interest rates, easy to overspend
Credit cards are one of the most common forms of credit. They’re great for making purchases, paying bills, and handling short-term expenses. You only pay interest on the amount you actually use, and as you pay down your balance, your available credit goes back up.
The downside? Interest rates are high if you carry a balance from month to month. Many people get trapped in long-term debt by making only the minimum payments. Also, because it’s so easy to swipe a card, people often spend more than they can afford.
3. 0% APR Credit Card
Interest Rate (APR): 0% (for 6 to 18 months, then variable)
Repayment Term: Promotional period plus revolving
Credit Score Needed: Wysoki
Collateral Required? ❌ No
Best For: Short-term borrowing if you pay before the promotion ends
Key Drawbacks: Rates increase after promo; needs excellent credit
Some credit cards offer a 0% interest rate for a limited time (usually 6 to 18 months). This is a great deal—if you pay off the full balance before the promotion ends. It’s like getting an interest-free loan.
However, this option is only available to people with excellent credit. And if you don’t pay it off in time, the interest rate can jump to 20% or more, quickly turning a smart move into a financial headache.
4. Payroll Loan (Consignado)
Interest Rate (APR): 1.5% – 2.5% per month (in Brazil)
Repayment Term: Up to 6 years
Credit Score Needed: Low to Medium
Collateral Required? ❌ No
Best For: Retirees, government workers, people with formal jobs
Key Drawbacks: Automatically deducted from your paycheck; not for everyone
In Brazil and some other countries, payroll loans are very popular. These loans are paid back directly from your salary or pension, making them less risky for lenders. This is why interest rates are lower—even if your credit score isn’t perfect.
They’re especially helpful for retirees, public servants, and workers with formal employment contracts (CLT). But if you lose your job or your income drops, it could be harder to manage your other expenses since this loan is deducted automatically from your paycheck.
5. Secured Loan (Home or Auto)
Interest Rate (APR): 5% – 15%
Repayment Term: 5 to 30 years
Credit Score Needed: Medium to High
Collateral Required? ✅ Yes
Best For: Lower interest on large amounts, home improvements, debt refinancing
Key Drawbacks: Risk of losing your asset (car/home) if you don’t pay
A secured loan uses something valuable—like your house or car—as collateral. This lowers the lender’s risk and gives you access to lower interest rates and larger loan amounts.
These loans are great if you need money for major home renovations or to refinance other high-interest debts. But there’s a big risk: if you don’t pay, the bank can take your home or car.
6. HELOC (Home Equity Line of Credit)
Interest Rate (APR): 6% – 10%
Repayment Term: 10 to 30 years
Credit Score Needed: Medium to High
Collateral Required? ✅ Yes
Best For: Ongoing home renovations, large medical bills
Key Drawbacks: Variable rates; depends on home value
A HELOC is like a credit card backed by the value of your home. You can borrow money as needed (up to a limit), and only pay interest on what you use.
It’s flexible and useful for people doing long-term home improvements or facing medical expenses that don’t come all at once. But the interest rate can change over time (it’s variable), and you could lose your home if you default.
7. Overdraft / Line of Credit
Interest Rate (APR): 10% – 40%
Repayment Term: Flexible (revolving)
Credit Score Needed: Różnie
Collateral Required? ❌ No
Best For: Emergencies, short-term cash flow gaps
Key Drawbacks: High fees; can be very expensive
An overdraft or bank line of credit gives you access to money when your account balance goes negative. It’s handy in emergencies, like when you have a surprise bill before payday.
But be warned: interest rates and fees are often very high. It’s not a good long-term solution and can create a cycle of debt if used too often.
8. Buy Now, Pay Later (BNPL)
Interest Rate (APR): 0% – 30%
Repayment Term: 4 to 24 weeks (or longer)
Credit Score Needed: Low to Medium
Collateral Required? ❌ No
Best For: Small or medium online purchases
Key Drawbacks: Easy to overspend; late fees
“Buy Now, Pay Later” services (like Klarna or Afterpay) are increasingly popular online. They let you split a purchase into multiple smaller payments—often with no interest, if paid on time.
These services are easy to use and don’t always require a credit check. However, if you miss a payment, late fees apply. And because it feels like “free money,” people often buy things they can’t really afford.
Summary Table (for quick reference)
| Credit Option | Najlepszy dla | Key Risk |
|---|---|---|
| Pożyczka osobista | One-time needs, debt consolidation | Rigid monthly payments |
| Karta kredytowa | Everyday spending, short-term needs | High interest if not paid in full |
| 0% APR Credit Card | Short-term financing without interest | Interest spike after promo ends |
| Payroll Loan (Consignado) | Retirees, public employees | Limited to certain groups |
| Secured Loan (Home/Auto) | Big projects, lower interest on large loans | Risk of losing collateral |
| HELOC | Flexible borrowing for ongoing expenses | Variable interest, home as collateral |
| Overdraft / Line of Credit | Emergency liquidity | High fees and interest |
| Buy Now, Pay Later (BNPL) | Small purchases online | May lead to overspending and late fees |
Final Thoughts: How to Choose What’s Best for You
Here are some quick tips to help you pick the best option:
- If you have a strong income and need money quickly: A personal loan can be a good option.
- If you want flexibility and only need to borrow occasionally: A credit card or HELOC might work better.
- If you’re shopping online and can repay fast: A BNPL plan with 0% interest could save money.
- If you need a long repayment term and own a home: Consider a secured loan or HELOC for lower rates.
- If your budget is tight and you want to avoid overspending: Stay away from credit cards and overdrafts unless you pay in full.
No matter which option you choose, always read the terms carefully and calculate how much you’ll really pay after interest and fees. Use tools like online loan calculators to see if the monthly payment fits your income. And most importantly, borrow only what you can afford to pay back.
