Monthly Archives: September 2019

Evolution of the short-term loan market

 

The short-term loan industry is developing intensively, while undergoing many qualitative as well as legal changes. In the article you will learn the main factors that have changed the market of smaller cash loans in recent years in Poland.

Finally there is a greater fight against usury practices on the loan market

Finally there is a greater fight against usury practices on the loan market

Society strongly stigmatized usury loans, especially against mortgages. Some people were paid extra money, usually small, provided that they entered the loan agreement with collateral in the form of real estate, the largest life asset. Such agreements were often terminated especially after minor misunderstandings, and loan institutions ordered the transfer of real estate. Most of the similar practices have been publicized, and the Polish Financial Supervision Authority has also dealt with the issue to a large extent, and work is currently underway on projects that will virtually eliminate usury practices from the economy.

Short-term loans on the internet are a great help for the client

Short-term loans on the internet are a great help for the client

The development of internet technologies was of great importance for the optimization of the short-term loan market. You can take short-term loans through dedicated websites at much lower rates. Some loan companies do not have to maintain expensive stationary branches, and this guarantees better conditions for cooperation with retail clients. Short-term loans are monitored by the Polish Financial Supervision Authority. Just a look at the popular list of warnings to learn about the risk of establishing cooperation with a particular loan brand. Pursuant to legal regulations, parabanks and retail banks must provide customers with information on the total cost of the liability. As a result, the cash loan comparison market has grown significantly. This is very good information, because the customer has gained greater awareness of the credit offer, has the tools to fight dishonest lenders, and reaches for money much faster, mainly thanks to the websites of loan companies.

Other elements of the short-term loan market development

Other elements of the short-term loan market development

In the industry, you deal with numerous financial intermediaries, partner programs for the promotion of cash loans, with payday loans linked to large promotions, e.g. the first repayment for PLN 0. Market competition, access to credit knowledge and borrower protection measures are important elements in the evolution of the short-term loan sector. How do you rate these factors regarding cash loans?

Mortgage loan offers

Banks has in its offer a mortgage loan offered in Polish currency. The maximum loan period here is 35 years, up to the age of 80, which is the oldest borrower. The maximum loan amount that can be taken out of this offer is 90% of the value of the real estate being credited.

There is no limit to the maximum amount of consolidation loan and mortgage.

There is no limit to the maximum amount of consolidation loan and mortgage.

The minimum income that a borrower must have to be able to apply for a loan at this bank is very low, because it is only PLN 800. For money, we can buy a construction and agricultural plot, as well as residential and service properties. The reference rate for the mortgage in PLN is 3M WIBOR, which means that it changes every three months and its new rates are set on the basis of market changes. A commission ranging from 0% to 5% is charged for granting a mortgage. Importantly, the commission can be credited.

Terms and costs of a mortgage.

Terms and costs of a mortgage.

The amount of commission for early repayment of the loan depends on the year in which we want to repay the liability. In the first one, early repayment will cost us 5%, in the second 4%, in the third 3%, in the fourth 2%, in the fifth 1%, and we will not pay anything from the sixth. The terms of early repayment of the mortgage can be negotiated with the bank. We will pay 1.5% for currency conversion into PLN and foreign currencies. The valuation of the property by the bank costs nothing if the customer does not receive a loan. If we renovate an apartment, its value increases. When insuring a low own contribution, we must take into account that the bank will increase the margin by 0.5%. Until the mortgage is entered in the land and mortgage register, we will have to pay bridging insurance, which will increase the margin by another 3.45%. Life insurance is not mandatory, but if the customer chooses it, the premium is a one-off premium and costs 3% of the loan for two years. The bank allows you to take advantage of a number of additional insurances that are not mandatory. Banks accepts various sources of income. These are employment contracts, work and specific contracts, rental income as well as income from business activities and income from abroad. The bank participates in the family on its own program, thanks to which you can refinance a loan under this program.

Customers can apply for a mortgage before marriage.

Customers can apply for a mortgage before marriage.

In the case of consolidation, a mortgage can account for up to 100% of the value of the property. For other purposes of taking out a mortgage, the loan amount is up to 70% of the property value. The bank sets the margin individually for a specific client and can range from 3% to even 15%. The biggest advantage of a mortgage is the maximum loan period, which can be up to fifty years. The borrower may be up to 80 years old. However, the biggest disadvantage of this offer is the very high commission and the bank’s margin. Credit insurance is also expensive. Banks does not provide the option of using credit holidays, nor is it possible to buy a promissory note. Instead, you can apply for a loan without a contract based on a statement. Customers also have the option of securing on the property a third party who is called the collateral provider. The income of insurance donors is not verified, but the bank will check such a person in the BIK and BIG database. Such a person must agree to be checked in these databases.

For whom a loan for an apartment?

It is well known that mortgage loans granted without an own down payment were withdrawn at the beginning of 2014. The reason was Recommendation S issued by the Polish Financial Supervision Authority, according to which banks were obliged to impose higher conditions on borrowers in order to reduce credit risk.

However, it should be taken into account that a mortgage is a liability for the next few decades. In addition, the loan comes with such fees as interest, commissions, and insurance.

 

In order to make it easier for young people to start a new life

apartment loan

The “Youth Apartment” program was created. It is a form of co-financing for own contribution. The basic condition is the appropriate age of people applying for funding and it is up to 35 years old (the age is important). Participation in the program is envisaged for both:

  • lonely people
  • in informal relationships and
  • marriages.

A person applying for such funding may not be a co-owner or owner of an apartment. The subsidy from this program is granted for the purchase of a flat or house from the primary or even secondary market.

Own contribution will be financed when the mortgage is concluded in the Polish currency and its equivalent amounts to at least 50% of the price of the flat. A mortgage should be taken for at least 15 years.

It is estimated that a young family with an income of 5,000 USD net can expect a loan of around 450,000 zł. Meanwhile, the debt would be for 30 years. However, to receive the aforementioned amount, the PFSA stipulated that the own contribution should amount to $ 45 thousand dollars

 

The own contribution is to make the mortgage loan safer

The own contribution is to make the <a href=mortgage loan safer” />

In addition, it will make the installment lower and easier to pay. Of course, when looking for the best loan offer, it is worth asking at various banks, because the minimum own contribution for a housing loan can be from 5 to 20%. Banks offer mortgage loans with own deposits (often higher than those specified in the PFSA recommendation). However, for banks the most important is creditworthiness.

In the case of the “Apartment for the Young” program, subsidies of various amounts are foreseen, which is influenced by specific conditions. The program provides an own contribution to the loan, which ranges from 10 to 15 percent depending on the size of the family. It should be remembered that the application for support of own contribution together with the loan application should be directed to the banks that have signed the agreement with Goodpocket Bank.

Of course, there are ways to get a loan, such as having an own investment, the customer asks for a loan after construction. The second option is to activate part of the amount of the mortgage at the initial stage, and until the rest is paid, it regulates interest only on part of the amount launched.

 

There are many ways to get the amount you need, such as:

There are many ways to get the amount you need, such as:

  • company loan from the company’s cash register,
  • cash loan from the bank for own contribution.

As a result, the customer first applies for a cash loan, which will be his own contribution, and then signs a mortgage contract.

The advantages of the MdM program include the possibility of buying real estate from the primary as well as the secondary market. Everyone interested can easily calculate the amount of their payment. It is worth remembering that the latest payment deadline is Q3 2018. Participation in the program is also provided for people who plan to build a single-family house in the economic system, and the co-financing takes the form of a refund of VAT on building materials.