What to do in case of problems with loan repayment?

The worst possible solution is to wait and count on the fact that the bank will not notice … Well, it will notice for sure, especially since currently loan installments are usually repaid automatically from the debtor’s account. Failure to pay the current installment will result in the company being reminded of the arrears and setting the next repayment date.

The debtor will, of course, be charged the cost of such a reminder, usually on the order of several dozen us dollars. Further lack of response will trigger the debt collection procedure and place the debtor in the Credit Information Bureau, which will be a source of further problems for the company. So what should you do to avoid potential problems?

Play open cards with the bank

Play open cards with the bank

If you expect problems with repayment, please inform the bank. Maybe together with a credit counselor you can find a solution to the problem (postponement of installment repayment, grace period or loan holidays). The financing institution receives a clear signal that we do not run away from the problem and are looking for a way to solve it. The range of available solutions depends largely on the conditions under which we took out the loan. If we have the option of taking into account, e.g. credit holidays (suspension of installment payments) in the contract, we can use it at the time of liquidity problems.

If the loan agreement does not provide for a grace period or loan holidays, we can of course still apply for one of these solutions, but we are dependent on the grace and disgrace of the officer examining our application.

Insurance can help

Insurance can help

Before you get in trouble, you should think about securing your loan repayment. The standard insurance covers situations in which a person running a business loses his ability to service debt, e.g. due to an accident, hospital stay or death. Even if none of these circumstances apply in our situation, it will be an additional argument for the bank in favor of “getting the debtor on hand”.

A positive history of cooperation with the bank, regular repayment of liabilities and regular inflows to the account will also work in our favor.


Where will you get a mortgage loan in USD?

First, a bit of history …. 84.20% of housing loans granted in the first quarter of 2012 were loans in USD. The share of mortgage loans granted in foreign currencies (USD and Swiss francs) was 14.72% (of which only 0.07% for loans in francs). In a word, you can say: the king is dead, long live the king.

The shares of loans granted 


Already in 2008 the situation was different – the share of loans granted in Swiss currency was almost 69%, and USD – 30%. What happened later, we all probably still remember well. Market collapse, increase in exchange rates, prudential measures taken by banks. All this resulted in a gradual decrease in the share of loans granted in Swiss francs.

USD loans gained the most (in the fourth quarter of 2009 their share was 72.40%, in the fourth quarter of 2010 – 76.60%, and in the fourth quarter of 2011 – 77.04%) – but not only. The USD currency tried to take the place of the Swiss franc. She partially succeeded.

The share of loans in USD in the fourth quarter of 2008 was 0.40%, and in the fourth quarter of 2011 – 17.17%. Changes in the share of mortgage loans in zlotys, Swiss francs and USDs can be traced in the chart below.

The USD march did not last long. The economic problems of some “USD” countries or financial supervision activities (Good Finance, in force since January 2012) caused that, as in the past, from loans in USD, banks are now withdrawing from loans in USD.

Does this mean that a person who is willing to take exchange rate risk should not count on it? No. There are literally several banks on the market that grant loans in the USDpean currency, but not everyone can apply for such loans.

The USD march did not last long. The economic problems of some “USDzone” countries or financial supervision activities (Good Finance, in force since January 2012) caused that, as in the past, from loans in USD, banks are now withdrawing from loans in USD.

Until recently, three banks – provided mortgage loans in foreign currency – the latter institution withdrew its offer at the beginning of August. Earlier loans taken from this bank will of course still be served.

USD loan and earnings



In the past Fine Bank had the lowest requirements for the net income. An average family could receive a loan in USD if their net monthly income was USD 6,100. Good Finance, on the other hand, set slightly higher requirements. In his case, the minimum net income necessary to receive a loan was USD 6,905.

GBank closed the top of the list. In this case, the minimum net income allowing to think about taking a loan in USDs was USD 7,050.

USD loan and the conditions for granting it



Loans in USDs are still “available”. Requirements for people who would like to finance the purchase of an apartment or building a house and take a loan in a foreign currency are so high that someone whose income is sufficient to receive a zloty loan, there is nothing to count on a loan in USD currency.

Why? First of all, due to the provisions of Good Finance of the GFIC. People who earn in foreign currency can currently only count on two offers from banks that are not very attractive.

Interest rates in the USD area are much lower than in our country. Despite this, the interest rate on loans in foreign currency does not differ much from those granted in USD – it is about 4%.

The average interest rate on loans 



The average interest rate on loans in USD abroad, for example in Finland, is from 0.92%. In Ireland, up to 3.02%. These data clearly indicate that credit abroad is much cheaper, but unfortunately – banks provide this type of financial support only for the purchase of real estate in the country in which they operate.

It is not profitable for foreign banks to change their credit terms, because their potential customers are usually not people from our country. Therefore, Poles earning abroad can apply for a loan in USDs only in two banks. Deciding on this step is also worth using the help of a financial expert.

The conditions for granting a loan in USD are similar to those for people applying for a loan in USD. Banks pay special attention to the form of employment – it must be permanent. It is also worth having documents confirming the received income.

Remember that a mortgage is best taken in the currency in which you earn, which is insignificant cases in USD. Perhaps the paid installment will be slightly higher, but increasing exchange rates will not make you sleepless nights and heart palpitations.

The municipalities’ debt counseling has big differences – Help varies

2017 was the first year in which all of Sweden’s municipalities offered budget and debt advice, according to a report from the Swedish Consumer Agency. Another positive news in this context is that overall the debt counseling function is more invested than before. In total, the municipalities had 258 annual workforce dedicated to budget and debt counseling on average during the year.

While the function has generally been strengthened, there are major differences between different municipalities. If the annual workforce is divided in minutes with the number of residents over 18 years. There is room for about 13 minutes of counseling per inhabitant. In many other municipalities, the figure is considerably lower and in some places the space can be counted in seconds per inhabitant. The national average is four minutes per inhabitant per year.


Municipalities with many indebted investments at least

debt loans

The Consumer Agency’s review shows that the municipalities that have the largest share of indebtedness actually spend the least on service and help with budget and debt counseling. Of course, this is the exact opposite of what it should be.

This relationship becomes particularly problematic when it comes to budget and debt counseling to those who have a debt with enforcement authority. According to the Swedish Consumer Agency, there are few municipalities that have many indebted people who can offer advice and assistance to the extent required. At the same time, large resources are in place in municipalities that have a significantly smaller share of indebtedness.


Help via Hello consumer

debt loans

If you have problems with high indebtedness, you should primarily turn to the municipality’s function for budget and debt counseling. They are obliged to help you, but you cannot expect to get help immediately. If you live in a municipality where the investment in the function is small, the waiting time can be longer.


Debt – this is how you take the first step

Debt - this is how you take the first step

Do you have a case at enforcement authority? Is the financial situation so difficult that you have difficulty coping with everyday life? A first step is not to hide from reality. The only way to overcome the situation is to produce a concrete and accurate picture of what the economic situation looks like right now. What are the debts and how big are they? Who should have paid? When should the debts be paid? Having a concrete picture of the situation makes it easier to start to sort out the problems. It should also be said that the budget and debt advisers in the municipalities are happy to see that you do this compilation yourself so that together you can immediately start looking at a plan to sort out the situation.


The bank raises interest rates on private loans and is expected to raise them even more

Just before Christmas, the bank raised its policy rate (repo rate). The increase was 0.25 percentage points and means that the policy rate now stands at -0.25%. It is still a historically extremely low-interest rate, but the first increase in many years can still have a lot of consequences for borrowers in Sweden. The repo rate is governed by all interest rates in society, including interest rates on private loans, mortgages, interest on savings accounts and more.

Several lenders, both large mortgage companies and smaller niche banks, have already made changes in the pricing of their loans. If you have private loans and/or mortgages, you may have already noticed this. We are now at the beginning of a period when the bank will continuously raise its policy rate. The question is what does it have for a direct effect on the loan?

Private loans run at variable interest rates

Private loans run at variable interest rates

What not everyone is aware of is that loan loans always run at variable interest rates. This means that the interest rate is not fixed but can be changed continuously. However, there are no major peaks and valleys. It’s not like a very small increase on the part of the bank causes the lenders to add several percentage points to their prices.

An interest rate is always specified for a loan agreement. For a private loan, for example, it may be numbered like 7.25% or 10.95%. This interest rate is the one that was decided when the loan was granted.

However, in the contract terms, it is always stated that the interest rate can be increased if the borrowing costs for the lending increase. An increase in the repo rate, which in turn affects market interest rates, can give rise to more expensive loans.

All private loans and other loans with floating interest rates become more expensive if the bank raises the interest rate.

When can a lender raise interest rates?

Thus, a lender cannot make a change in its rates at any time or in any case. Borrowing costs for the lender are required to increase. If borrowing costs increase, a lender, such as a credit market company active in private loans, has the opportunity to “pass on” this extra cost to customers.

What, then, means borrowing costs more accurately? Borrowing costs are all costs that deal with a lender’s deposits. The money that banks and credit market companies lend has in turn been borrowed.

There are two ways to borrow, namely to borrow from other banks and to borrow from depositors (in savings accounts). The majority of lenders combine these two ways. Both types of interest rates that the lender pays are raised if the bank’s repo rate is raised.

Borrowing costs and other costs

Banks and credit market companies also have other costs. In addition, all lenders want to make a profit. A lender may not raise interest rates due to factors such as increased risk, greater administration or a desire for higher profits.

This means that a lender cannot really raise the price of an existing car loan or mortgage in any other case than if the bank has recently decided to raise the policy rate. It provides a kind of predictability for loan customers.

Interest rate hikes for private loans – for example

Interest rate hikes for private loans - example

It is easy to believe that an increase from the bank of, for example, 0.25 percentage points immediately makes all private loans just 0.25 percentage points more expensive. Sure there is a very clear link, but it is not like the interest rates on private loans slavishly follow changes in the policy rate.

What is quite clear, however, is that the price for borrowing always becomes higher after an increase in the repo rate. If it is about, for example, 0.10 or 0.45 percentage points depends entirely on how borrowing costs change.

In January, several credit market companies and banks raised the interest rate on their private loans. Some increased by just one-tenth of a percentage point, while others raised the price of existing loans by up to 0.50 percentage points.

Example: You were granted a USD 100,000 loan in August 2018 at an interest rate of 5.85%. Because of the bank’s new repo rate, the lender raised the interest rate by 0.30 percentage points. The new interest rate is thus 6.15% and you are obliged to pay this price until something else is announced.


Loan with debt restructuring

Those who have burdened themselves too much often think about debt restructuring. That makes perfect sense, because by bundling the individual loans, you only pay the monthly installment in one place and also save money. So the debtor gets an overview of his finances again. A loan with debt restructuring is therefore the ideal solution.

How does a loan with debt restructuring work?

How does a loan with debt restructuring work?

In the case of a loan with debt restructuring, all liabilities are combined in one sum. Most of these were already existing loans, overdrafted current accounts, installment purchases from mail order companies or the use of credit cards. You quickly lose track. A debt rescheduling loan replaces all of these liabilities and combines them into a single loan. The bottom line is that you also save money because the interest is now shifted again. This also means that at the end of the month there is more money left in the household budget. Who doesn’t dream of it?

From Cream Bank

From Essen Bank

Many banks create difficulties when so many debts have been amassed. If there are already negative entries in the Credit bureau, the established banks are opposed to a loan. But a bank is known to be ready for a loan even if there are creditworthiness difficulties. It is that of Cream Bank, which has its appearance on the Internet. The repayment modalities are flexible and early repayments are also possible. The terms are generously chosen at 120 months. There are also no processing fees.

Other banks

Other banks

If the credit rating has not yet been damaged, all ways are open. However, it is then worth using the various comparison computers on the Internet. The banks have different interest rates and the best offer can only be filtered out by comparing them. Because interest alone can save a lot of money.


How to avoid an expensive building loan

Only a few families can make their own home without a home loan . When observing the real estate finance market, various aspects catch the eye. Obvious is the low interest rate level, which leads to high bank lending amounts for the building loan.

On the other hand, some financing customers do not seem to recognize the potential behind the low interest rate for a home loan. The result: Higher loan amounts are financed – without pulling the right register in terms. A building loan binds the household to the loan for years.

Home loan: What can be the worst case scenario?

Home loan: What can be the worst case scenario?

Fixed interest rates from ten to 15 years are unfortunately not uncommon.

Anyone who has made mistakes in the calculation and planning as a building owner experiences unpleasant surprises.

The consequences of illness or unemployment are even more dramatic. If there is suddenly a lack of money for the installment, the mortgage may be terminated and enforced. Can these obstacles be avoided when transferring home loans?

Building finance: You have to know these stumbling blocks

Building finance: You have to know these stumbling blocks

You can clear many stones out of the way with a building loan. This includes, for example, the high residual debt at the end of the fixed interest period.

Possible ways out are:

  • higher repayment rates
  • Special repayments
  • Redemption adjustments.

A somewhat higher repayment rate leads to a faster reduction of the remaining debt. The special repayment can be used especially with variable salary components. Often offered today in the five percent range, it can make a significant contribution to debt repayment.

Redemption adjustments work in both directions. However, this instrument should be used with care, as it is only available in limited numbers.

Home loan – securing low interest rates in the long term

Home loan - securing low interest rates in the long term

An important point is the fixed interest period. The lower the building rate, the more positive a longer term can develop. Even if banks charge an interest surcharge here – the advantage of long-term low interest rates should not be underestimated.

You should definitely consider skeptical loans that are offered as a combination of advance loan and home loan. Here the calculations have to be viewed critically, since not every “pitfall” is communicated openly.