Why repay loans, credits and installments on time?
January 8, 2020
About 2.5 million Poles do not regularly pay their financial obligations. The total amount of debt exceeds $ 60 billion and is constantly growing. This is usually the result of a loss of liquidity, incorrect or less reckless decisions. Why are your loans loans and installments worth paying back on time at all costs? What are the consequences of this type of debt?
The first of these is growing interest. Failure to pay liabilities on time is completely unprofitable, because the amount of debt will increase until repayment, and we do not allocate this money for investments. Interest is also increased by the costs of reminders sent to the consumer. Banks approach debts differently, depending on their policy, but you can usually get along with them and set a more convenient repayment schedule. It’s really not worth the wait.
Especially that the aftermath of tardiness in paying off debts and ignoring this state of affairs is the spiral of debt. This is a situation in which we fall into increasing debts without paying our obligations on time. Sooner or later there is a bailiff’s execution, which in the best case ends with a rather expensive settlement, in the worst blocking of the bank account or loss of part of the property.
Building a positive credit history
Even if irregular debt repayment is a temporary situation, it can have severe consequences for our future. Banks operating on the Polish market in terms of customer policy were able to form an alliance. His personification is the Credit Information Bureau, which is a database gathering information about all repayments regulated by the consumer. Any delay longer than 30 days is associated with a decrease in the individual consumer ranking points and a negative entry in the database. This is one of the most important criteria according to which banks and non-bank lenders assess the credibility of the client. Unfortunately, in practice one unpaid installment amounting to even several dozen dollars can ruin our dreams not only about the next installment purchase, but even a mortgage, despite meeting other conditions.
Debtor bases in practice
In addition to BIK, there are other debtors’ bases in Poland. These include, among others, the Economic Information Bureau or the National Debt Register. Banks and non-bank institutions also use them. Although repayment of debt makes the negative entry disappear from the database, but as long as it is in it it limits our financial flexibility and creditworthiness.
How do you find funds to pay back your debt?
If we fall into debt, psychology plays a huge role. You should not be afraid of receiving correspondence, phone or taking the initiative towards the creditor, which will improve our situation. You can usually get along with banks and even bailiffs. In addition, we gain time to find an additional source of income. It can be a loan provided that we realistically assess our repayment options and is granted on favorable terms.