Saturation with cash loans is growing, especially in the online loans sector. Not every borrower with good intentions will receive a favorable loan agreement to sign.
The market is very diverse and particularly sensitive to monitoring the borrower’s creditworthiness. What is the situation of the average borrower in Poland? About this in the article below.
Market diversification or beneficial?
The credit industry is normally divided into offers for individual clients and services dedicated to business owners. Other target groups of the credit market are farmers, students, pensioners, independent specialists, e.g. lawyers, doctors. The customer in the premium category, with high monthly earnings, always receives a loan agreement on convenient, relatively economical conditions.
The worse the creditworthiness, i.e. the poorer the customer, the worse the contract, which leads to equalization of risk. Retail banks and parabanks are usually profitable to serve one large borrower instead of hundreds of small, which is understandable from the perspective of normal business operations. The lack of access to cash loans is a social and political problem.
Inability to meet basic consumer needs, because it is mainly a cash loan, generates adverse moods in the economy and forces the government to make concessions in managing social programs. Lack of credit in the national (general) economy means shifting the burden to public institutions – social programs.
Creditworthiness is the most important concept
On the other hand, the borrower’s limited creditworthiness prevents him from using all available debt instruments. This results not only from the policy of retail banks, but from top-down guidelines of the National Bank of Poland (central bank) and the Polish Financial Supervision Authority. Retail banks service loans as well as deposits from a social perspective. Any threat to the retail bank’s liquidity is clearly reflected in higher economic indicators.
The situation of the borrower, especially the poorest, has been worsening in recent years due to scrupulous creditworthiness checks. Submitting too many loan applications is often completely excluded from signing the contract. The key need is the evolution of the credit market in favor of fair rather than usury agreements. In some contracts, not only interest is the main cost, but commissions reaching dizzying amounts and even fees for reaching the customer.
An aware borrower has a much better chance of protecting his fixed assets. Many contracts on the domestic credit market are secured, e.g. with real estate, or relatively dangerous blank promissory notes. Such behavior is fundamentally negative for the borrower, who pays the risk of losing the property generated for generations by obtaining little money.
Alternative forms of financing needs on the offensive
However, there is a significant improvement in the sector of social loans as well as loans obtained from private investors on personalized terms.
A borrower with an unfavorable creditworthiness is able to take advantage of many interesting alternatives, and with the justification of a normal repayment plan receives a loan at a good interest rate.
In addition, you can see virtually the entire credit market through free multimedia comparison websites (integration of all offers). How do you assess the credit market for the average borrower in the country?