Even making a single commitment is a heavy burden for many consumers on the family budget. In the event of a financial problem, many make a risky decision to take another loan to pay off the existing one. It’s a straightforward way to get into debt. A debt loan solution may be the answer. what is he talking about?

Do you need debt consolidation? Check offers:

Last Updated: February 23, 2022

The ranking is created according to the frequently selected offers

		6 – 84 months Payment period	PLN 3,000 – 60,000 sum	19,85% RRSO	12,50% benefit	3,016 people chose this offer ” Check “ ⊕ Add to Compare ⊖ Remove from comparison
	3 – 120 months Payment period	1,000 – 200,000 PLN sum	9,59% ? Details of costs and commissions will be available prior to signing the contract with a specific lender RRSO	1,64% ? Details of costs and commissions will be available prior to signing the contract with a specific lender benefit	1768 people chose this offer ” Check “ ⊕ Add to Compare ⊖ Remove from comparison
	9 – 120 months ? consumer loan from 9 to 96 months; Consolidation loan for 12-120 months Payment period	1,000 – 180,000 PLN ? 1,000-80,000 PLN – consumer loan; 10,000-180,000 PLN – consolidation loan. sum	12.96% RRSO	benefit	484 people chose this offer ” Check “ ⊕ Add to Compare ⊖ Remove from comparison
principal cash loan		15 years Payment period	1,000 – 50,000 PLN sum	12.93% RRSO	9,50% benefit	488 people chose this offer ” Check “ ⊕ Add to Compare ⊖ Remove from comparison
PKO BP Mini Ratka – Consolidation loan		2 – 120 months Payment period	1500 – 200,000 PLN sum	10,59 % RRSO	7,20% benefit	77 people chose this offer ” Check “ ⊕ Add to Compare ⊖ Remove from comparison

Many Poles face the decision to take out a bank loan at some point. Sometimes the trigger is the need to obtain an emergency injection of cash to cover urgent or unexpected expenses. Other times, at a certain point in time, we simply need more money that we don’t have.

As you know, getting a loan is not so easy. Banks operate according to relatively strict rules, making a careful selection of their clients. Those who show good creditworthiness are desirable. This criterion is evaluated on the basis of, among other things, entries in the Credit Information Bureau (BIK), that is, the record that collects information about the repayment of current obligations and loans of the bank.

In addition, the current financial situation is also evaluated. The loan will not be obtained by a person who has a very low income and has problems with the timely repayment of his obligations. Which is understood, inter alia, monthly housing expenses (rent, bills), as well as the issue of supporting yourself and possible third parties. It can also be expenses resulting from a cash loan or a loan already taken and credit cards.

By making a positive decision on granting finance, the bank determines that the person is financially reliable and able to lend him a fixed amount of money under certain conditions.

Anyone can fall into debt

According to the statistics of the Association of Polish Banks (ZBP), the total value of Polish liabilities to banking institutions amounts to 797.3 billion PLN (63% of this amount is due to mortgage loans).

Although few people who have to take on their financial obligations think that they may have problems with repayment in the future, falling into debt is a big problem among many borrowers.

In 2021, the total amount of financial arrears due to late payments amounted to 72.5 billion PLN . There are undoubtedly many reasons for this phenomenon. Often, people who plan to repay their debts on time face unexpected obstacles, such as illness, accidents, destruction of a valuable thing that requires repair, etc.

Others may also experience financial problems through the loss of a stable source of income , such as separation, bankruptcy, or downsizing. Such people, who so far have all the expenses in relative order, lose their cash flow.

To protect themselves from the specter of debt collectors and debt collectors, many are looking for a solution in loans or other bank loans. Unfortunately, taking on one obligation to pay off the other, can lead to even greater financial problems. This is known as a debt loop or spiral.

What is a debt loan?

Are there effective ways to get out of the vicious circle that undoubtedly entailed obligations to pay previous obligations in order to avoid obtaining the status of a debtor and the dire consequences of that? Financial institutions try to meet the needs of consumers in such a situation. For people who have more than one financial commitment on their mind, getting a debt loan may be a good solution.

A debt loan is nothing more than a loan that is taken to pay off all existing financial debts. One large commitment is made, and the money obtained is used to settle the total amount of debts owed to loans and other liabilities (such as loans). After it is repaid, the consumer only bears the total amount of the debt loan. Of course, payment is made in the form of monthly installments, in the amount previously agreed upon by the consumer and the donor through negotiations.

A debt loan can turn out to be a good solution and at the same time a last resort against falling into serious debts. This can eventually lead to debt collection companies’ actions, and eventually the minutes. Avoiding the actions of these entities will be impossible, and the consumer may lose valuable assets and unnecessary stress in such a situation.

Non-bank debt loan is granted by loan companies. It is these institutions that can help debtors with poor creditworthiness. To receive a consolidation loan in banks, you need more – for example, there are no negative entries in the records of debtors.

Where to get a debt loan and what conditions must be met?

Debt loans and credits are given in banks and various non-bank institutions, which sometimes specialize only in giving loans to people who have debts. Due to the wide variety of market offers, it is difficult to define unambiguous conditions that people who want to obtain a debt loan must meet. However, sample inputs can be easily identified.

• Some businesses may find it necessary to have regular income from a legal source. For this purpose, the borrower may be required to provide a certificate from the employer documenting the length of service and earnings. Others may request, for example, a bank statement documenting regular inflows into the account.

• The debt loan institution can also check consumer data in financial records and debtor databases. Both BIK (Credit Information Bureau) and BIG (Economic Information Bureaux) databases can be checked, such as BIG InfoMonitor, KRD (National Debt Registry), ERIF or KBIG (National Bureau of Economic Information). The assessment of these entries is intended to allow you to know the financial position of the consumer in terms of his obligations and to determine how to present his creditworthiness.

Debtors will also certainly ask for the exact list of debtors and the full list of existing debts. You will need to submit:

• Total amount owed.
• The number and names of individual creditors, as well as the detailed amount owed to each of them and the time the debt arose.

Who can benefit from a debt loan?

Loan institutions differ from each other in terms of offers and conditions that must be met by customers. However, we can extract some basic requirements that often appear in the regulations of non-banking companies. These are:

• The majority of.
• Polish citizenship and residence in the country.
• A full-fledged.
• Have a valid ID, bank account, phone number and email address.
• List all of your unpaid obligations.
• Fill out the loan application and accept the contract.

Can I get a debt loan without collateral?

Although loan companies are not very restrictive when checking the creditworthiness of customers, they also have to limit their risk by applying certain requirements.

One way is to examine the borrower’s income and cost of living or carefully consider his outstanding obligations.

Some lenders may turn a blind eye to negative entries in debtor records, but to really get a large loan and consolidate your debts, collateral may be necessary.

Collateral may be used by loan companies in the form of, for example, cars or other valuable movable property. If we want to get a real estate debt loan, it will be necessary to go to a credit union or a bank . According to the law, only such institutions have the right to accept such – necessary for life – security.

A form of guarantee may also be a guarantor, i.e. a person who will certify his property to us.

Debt loan – is it worth it? Tips

So is taking out a debt loan a worthwhile solution? The decision to enter into such a commitment must be preceded by a detailed analysis of its financial position. He should remember the following basic guidelines.

1. Write down your home budget in detail . The debt loan will cover the high value liabilities incurred thus far, but it is also an expense in itself. For this reason, it would be a good idea to plan your living costs for the coming months, bearing in mind the need to pay subsequent installments. You may need to identify or forgo some expenses. It might be tough right now, but in the long run – it’s worth paying that price for a debt-free life.
2. Study the market offer carefully . Today, many companies that operate intensively and advertise on the Internet specialize in debt loans. It is worth taking the time to familiarize yourself with the criteria of a few selected institutions and put them side by side. We recommend – pay attention to the terms and conditions of the offer, terms and conditions for customers, debt loan costs (commission, interest rate, effective annual interest rate) and check company data. We are talking here about both the NIP number and the entry in the National Courts Registry, as well as the address and telephone number. Also check online reviews about a particular company, preferably from different sources, to avoid the risk of stumbling upon manipulated reviews.
3. Show your financial situation clearly . If you can find a worthwhile offer and decide to take advantage of it, you will not avoid talking to a counselor about the state of your current finances. It is worth presenting them clearly and honestly, as well as negotiating the detailed terms of the loan with an employee of the company. The purpose of the obligation is to free yourself from the yoke of debt, so it is in the interest of the consumer that he receives money in the appropriate amount, which he will then be able to return.

Debt loan and consolidation loan – the differences

In the context of financial obligations aimed at helping you free yourself from debt, in addition to the term “debt loan”, another phrase is often heard – a consolidation loan. There is a significant difference between these types of credit, although they can sometimes be found as interchangeable terms. In fact, they have one thing in common. Both liabilities are set up to pay off your financial arrears (liability consolidation allows) to free yourself from the debt loop.

On the basis of the differences, they are more significant. First of all, consolidation loans are financial products that can be obtained in the banking sector (we can expect a positive credit decision if we do not have entries in the debtors databases). Offered, among others, PKO Bank Polski. Debt loans are unheard of in bank offerings . As mentioned above, non-banking companies specialize in it today, and sometimes their activities are based only on debt loans.

Such obligations can be obtained by people even with a negative credit history, which indicates a serious increase in debt. Banks are closed to such customers (they do not give loans to consumers with poor creditworthiness), so the creation of a debt loan service is a specific response of the financial market to the needs of consumers. However, you should be aware of the side effects that this involves. About it in the section below.

Debt loan – the biggest drawbacks

A debt loan is supposed to be a convenient solution for people in difficult financial situations. However, it is not without flaws. An organization making such a commitment must somehow benefit from a risky activity. After all, giving loans to people who do not have good creditworthiness gives less guarantee of getting back such money. Non-bank companies compensate for this by imposing high commitment costs.

It may not be clearly visible in the monthly installment, but in general and after comparing the loan amount with the total amount of the obligation – the scale is noticeable. Non-banking companies will charge a large commission, setup fee and interest, which means significant expenses for the customer related to returning the loan. On the other hand, with the goal of freeing yourself from debt – even such an expensive loan can become worth the price.

Advantages of a debt loan

Despite some drawbacks, debt loans also have their advantages.

• Sometimes this is the only way to get rid of a tired debt.
• Instead of multiple installments, we can make one payment.
• No more penalty interest and debt collection costs for many different creditors.
• Faster loan process than banks.
• There are home loans on the market.

Otherwise, how do you deal with debt?

If for some reason debt loans are not suitable, there will unfortunately not be many options left for us to take advantage of. We’ve already mentioned about mastering your budget by planning it carefully and limiting expenses. However, when that is not enough, we can decide:

• Family Assistance Application – The family can give us an interest-free loan. There will be a cheaper solution but it may spoil family relations,
• Negotiations with creditors – In order to avoid court hearings, you can try to reach an agreement with creditors who want their money back. Some financial institutions allow you to extend the period of payment of obligations,
• Consumer bankruptcy – it is a last step when other solutions do not bring the desired result. The consumer is declared bankrupt by the court at the request of the debtor. After it is declared, the trustee of the court will start selling the debt assets to meet the claims of the creditors. It’s a painful way, but sometimes there is no other way out.

sources:

https://www.zbp.pl/raporty-i-publikacje/raporty-cykliczne/raport-infokredyt

https://media.big.pl/informacje-prasowe/727840/raport-infodlug-w-rok-ubylo-prawie-9-mld-zl-zaleglosci-i-ponad-143-tys-niesolidnych-dluznikow