Record debt of Poles
October 20, 2019
From time to time, the National Register of Debtors provides data on the state of Polish debt. See how much the maximum debt in Poland is currently.
Everything seems to indicate that the majority of our countrymen do not find themselves in the world of finance, including being unable to take care of their own budget. In practice, this means a loss of control over your own portfolio. The most common way to get out of trouble is to get a loan or credit. However, instead of helping, it can throw even more problems on the shoulders.
From time to time, the National Register of Debtors provides data on the state of Polish debt. Reports show that over 15 million of our countrymen already have financial obligations in various forms towards banking and non-banking institutions, and the financial situation of people who have taken out a loan or credit.
Maximum Polish debt – where is the border?
Could it be even worse? Unfortunately yes. Experts sound the alarm. Living costs are rising, and the amount of the lowest wage in Poland leaves much to be desired. However, the reasons for the growing debt of Poles should be sought deeper. The first thing is the lack of basic education regarding the sphere of money and material goods. In every Polish public school, we do not see lessons in which children are taught how to prepare and then summarize the home budget, convince them to save or realize the importance of personal finances. The result of a lack of appropriate knowledge and good habits is a reduced sense of value of money, and thus – wasting it, and in later life, in the event of a loan, problems with its appreciation and repayment.
Portrait of an indebted Pole
According to KRD reports for this year, the most indebted consumer has over 45 million USD to pay, and seventeen record holders in the whole country, i.e. people with the largest debts, have to give away 122 million USD! In a large proportion of cases, so-called securitization funds, which have bought liabilities from original creditors, are fighting for recovery. Among the compatriots who have a loan or a loan to pay back, men are leaders. They make up 76 percent groups of indebted inhabitants of our country. The age of people who delay payment is different and there is no rule here, but the data indicate that we are talking mainly about people in their forties. However, the average debt of Poles is around 40,000. USD per person, and the amount of all liabilities reaches over USD 570 billion!
How do Poles get into debt?
Statistics provided by the Polish Bank Association show that Poles have signed nearly 30 million loan or loan agreements so far. How many loans per person? It is difficult to state it unequivocally, since no specific data regarding this area has been publicly disclosed, but it can be assumed that in many cases borrowers do not limit their debt to only one institution. There can be many such reasons. The first one that immediately comes to mind is the need for them to incur further obligations only to pay off the previous ones. Unfortunately, this is a road to nowhere, and in the worst case – to even greater financial problems. This practice can lead the debtor into a so-called debt spiral. You can run into even more trouble by borrowing from insecure lenders, for example in parabanks.
What do Poles get in debt for?
According to the ZBP report, over 8 out of 15 million Polish borrowers took a consumer loan, while housing loans can boast a little over 2 million. The value of the former last year amounted to nearly $ 80 billion, which is 2 percent. more than in 2015. However, the total amount of mortgage loans amounted to almost $ 40 billion. Poles did not repay, taking all liabilities into account, $ 28 billion of receivables.
How to take a loan?
In the context of many loan agreements signed by one person, questions arise whether this is possible at all? How to take another loan if we are already in debt? Will the bank trust us enough to borrow more money? The answer is not obvious. Depends on what we mean by ‘indebted’. Is it only the person who has contracted, but regularly repays, or the debtor who is delaying or does not pay the debt at all? If we are talking about the first situation, our creditworthiness will be of key importance, which is calculated using point analysis, which we write about HERE . If it is high and we did not take the highest loan amount offered to us, there is nothing to prevent us from applying for the next amount. However, the situation becomes more complicated in the event of late payment, not to mention deliberate evasion. Certainly, this will not escape the attention of the bank, which before performing any activity related to the granting of a new loan to us, will check our data in BIK, i.e. the Credit Information Bureau, whose task is to collect, process and provide lenders with the information they need during the loan granting process , loans, bank guarantees, sureties and other financial instruments.
Loan with a family member
If the only obstacle on the path to getting a loan is too low creditworthiness, there are several effective ways to increase it. One of the most frequently used by Poles is taking a loan with a family member as a co-borrower. These are both consumer loans, in particular cash and mortgage loans. Loans can be taken by both close and distant family members or people who are somehow included in it. It is important, however, that each of the co-borrowers is checked by the bank with the same diligence and exactly on the same principles. The fact that the responsibility for paying the debts will be joint and several is irrelevant in this case. It is advantageous, however, that the creditworthiness of all applicants is somewhat averaged. In practice, it may look like the grandson and grandfather take the loan together. The first is a student, so he has a small chance of receiving a high amount on his own. Grandfather is a pensioner, i.e. a very good customer for the bank, with a permanent, monthly benefit affecting the account. The bank extracts the average from all data and creates, in a sense, one creditworthiness for both co-borrowers. However, if one of the people has insufficient financial means to be able to receive any credit on their own, they cannot take it even with a close person. Importantly, many banks at the co-borrower’s institution introduce the minimum and maximum age criteria for one of them. It is accepted that the oldest co-borrower may be 70-75 years old. The planned repayment period of receivables depends on the age of both, and thus – the amount of interest is reduced.