How do Slovaks pay their debts? Non-performing loans are gradually declining

Slovaks are disciplined in paying their debts. The share of non-performing loans to households has been gradually declining for three years now.

“Slovaks are the most exemplary and responsible for mortgages. Share non-performing loans on the total volume of housing loans in 2017 was 1.6%, at the end of 2019 it was 1.4%, “says analyst Poštová bank Jana Glasová. The National Bank of Slovakia tightened in several phases lending, thus wanting to prevent especially the indebtedness of people who they would have difficulty repaying their obligations in times of crisis.

To minimize the risk of late payment, we should follow Postal banks follow several rules. The main and basic team is to borrow wisely. Loan repayments should not exceed 30% net income. At the same time, Poštová banka recommends that clients choose repayment period so that the final installment meets their possibilities, whereas it is more appropriate to choose a longer maturity period and thus reduce yourself monthly load. It is also good to insure a loan.

In case of an unexpected life situation, due to which the client gets until he is temporarily unable to repay the loan, he should contact his bank immediately and inform it of the circumstances. According to Poštová banka, the worst is stop repaying and not inform the bank of the reasons. In that case, from her the client obtains a negative entry in the credit register, which reduces his creditworthiness and in the future also a chance to obtain another loan. If persistent the client’s reluctance to agree with the bank entrusts the bank with debt collection executor.

It is in the context of the prevention of excessive indebtedness and subsequent problems with the repayment of loans came a gradual tightening of the provision loans. This was done in individual phases, with the last one entering into force this year. The central bank has adjusted the limit for the maximum share installments to income reduced by the subsistence minimum from 80% to 60%. Although the reduction in the share of new loan applicants will decrease there is also a risk of client failure. “The change is felt mainly by households with lower incomes, which have spending on the edge, “she told for agency SITA director for loans at FinGO.sk Eva Saber.

The regulation of lending in the current situation is according to the financial OVB Allfinanz Slovakia analyst Mariána Búlika requested. However, it is questionable the chosen method of introducing the latest regulation. According to Búlik, too rapid approval caused a chase for loans at the end of the year, and high pre-supply. An artificial increase may appear this year income for some applicants. “It simply came to our notice then strengthened real estate price growth and rental price growth. Higher prices already will remain on the market even after a possible slowdown in the pace of lending this year, “ Búlik stated.

Slovaks are disciplined in paying their debts. The share of non-performing loans to households has been gradually declining for three years now.

“Slovaks are the most exemplary and responsible for mortgages. Share non-performing loans on the total volume of housing loans in 2017 was 1.6%, at the end of 2019 it was 1.4%, “says analyst Poštová bank Jana Glasová. The National Bank of Slovakia tightened in several phases lending, thus wanting to prevent especially the indebtedness of people who they would have difficulty repaying their obligations in times of crisis.

To minimize the risk of late payment, we should follow Postal banks follow several rules. The main and basic team is to borrow wisely. Loan repayments should not exceed 30% net income. At the same time, Poštová banka recommends that clients choose repayment period so that the final installment meets their possibilities, whereas it is more appropriate to choose a longer maturity period and thus reduce yourself monthly load. It is also good to insure a loan.

In case of an unexpected life situation, due to which the client gets until he is temporarily unable to repay the loan, he should contact his bank immediately and inform it of the circumstances. According to Poštová banka, the worst is stop repaying and not inform the bank of the reasons. In that case, from her the client obtains a negative entry in the credit register, which reduces his creditworthiness and in the future also a chance to obtain another loan. If persistent the client’s reluctance to agree with the bank entrusts the bank with debt collection executor.

It is in the context of the prevention of excessive indebtedness and subsequent problems with the repayment of loans came a gradual tightening of the provision loans. This was done in individual phases, with the last one entering into force this year. The central bank has adjusted the limit for the maximum share installments to income reduced by the subsistence minimum from 80% to 60%. Although the reduction in the share of new loan applicants will decrease there is also a risk of client failure. “The change is felt mainly by households with lower incomes, which have spending on the edge, “she told for agency SITA director for loans at FinGO.sk Eva Saber.

The regulation of lending in the current situation is according to the financial OVB Allfinanz Slovakia analyst Mariána Búlika requested. However, it is questionable the chosen method of introducing the latest regulation. According to Búlik, too rapid approval caused a chase for loans at the end of the year, and high pre-supply. An artificial increase may appear this year income for some applicants. “It simply came to our notice then strengthened real estate price growth and rental price growth. Higher prices already will remain on the market even after a possible slowdown in the pace of lending this year, “ Búlik stated.