The debt of Poles is growing at an increasing pace.

Numerous entities monitoring the loan and credit industry are preparing reports summarizing the debt of our countrymen. Research results indicate a growing wave of contracting commitments. It also turns out that many Poles have problems with timely repayment, and more and more young people are reaching for financial products. What is the debt of Poles? 

Pole, or borrower?

Pole, or borrower?

Today, advertising of loan companies and banks is everywhere. Institutions from the financial industry tempt their current and potential customers with numerous credit products, loans with a low interest rate, as well as loyalty bonuses and gifts for opening an account. No wonder that several million Poles were persuaded to take advantage of the proposals of these entities.

The total sum of indebtedness of the country’s residents on the Vistula in 2017 was already over PLN 25 billion. In turn, from the data for the third quarter of 2018, this amount was PLN 34 billion. As you can see, the trend is growing.

From the statistics presented for years by, among others, the National Debt Register and the Economic Information Bureau, it can be concluded that our nation is one of the most and most indebted nations in Europe and even in the world. Nearly half of Poles had or had debt, and some even have several loans or credits at the same time.

Who is in debt?

Who is in debt?

Men lead the rankings. The total debt of Poles in 2018 is almost PLN 74 billion. Men between 35 and 44 years have the most debt.

The Economic Information Bureau reports that people aged 18-24 already have over a billion zlotys in debt.

Similar age parameters result from statistics on Polish women. Interestingly, the 62-year-old from the Lublin Province is the record holder, and his debt is over PLN 69 million. What can worry and pay attention to specialists dealing with the loan industry is the fact of the growing debt among young Poles. This amount is still growing. In 2017, it amounted to less than PLN 1 billion. How big is this group? According to current statistics (Q3 2018) – 158.6 thousand people. The average per person is about 6,653 PLN.

The growing debt of Poles

The growing debt of Poles

Unfortunately, the forecasts indicate one thing – it will not be better. Young Poles will be even more in debt every year. Since 2016, as calculated by KRD, the value of debt in this age group increased by over PLN 200 million. At that time, 110,000 people had a total debt of PLN 300 million. It also turns out that the volume of obligations is growing together with Poles. Why? Well, people between the ages of 18 and 24 have a debt of PLN 1.1 billion. On the other hand, debtors in the range from 25 to 34 years of age PLN 9.7 billion. The record holder in 2017 was a 24-year-old resident of Wrocław, who has a debt of PLN 625,000 on his shoulders.

Characteristics of the debtor

Characteristics of the debtor

According to the Economic Information Bureau, most debtors are registered in the city, usually in large agglomerations. Invariably men are more likely to reach for financial support. The latest research shows that it is about 61 percent. indebted. Even in 2018, there were usually students who moved from smaller to larger cities. However, the proportion of older people is currently increasing. Data from the third quarter of 2018 shows that already 41% of people aged over 65 have taken loans or credits many times. 

A conscious loan?

A conscious loan?

Poles’ debt is not always the result of loans or credits. Of course, this is the most common cause of debt, but just behind the financial products of banking institutions and specialized companies are obligations to mobile operators or debts arising from outstanding penalties for public transport without a ticket. The last of these sources of debt was valued at PLN 47 million.

What do we owe?

What do we owe?

When it comes to loans, young Poles take them especially when they move out of their parents to a larger, academic city. Studies, although free in theory, in practical terms extract the remains of savings. Commuting to the university, student life, but also teaching aids and above all – renting an apartment. All this means that the budget of the young Pole is running low on liquidity. The first impulse, of course, is a request for support addressed to the family. However, not everyone can ask for such help.

A life loan

A life loan

The solution is to apply for a loan. Companies that provide this kind of support are open to people of all ages. The growing popularity of installment or short-term loans, commonly known as payday loans, is largely due to their wide availability. Almost anyone can make this kind of commitment. A non-bank institution usually does not require the presentation of an income certificate or an employer’s statement, nor does it check the applicants in the databases of debtors such as the Economic Information Bureau or the Credit Information Bureau, whose registers include both reliable and non-regular debtors.

Non-bank loan – fast, easy and pleasant

Non-bank loan - fast, easy and pleasant

Young Poles choose a loan instead of a bank loan for several other, but extremely important reasons. Products proposed by non-bank institutions are granted quickly and without unnecessary formalities. In practice, this means that the loan company does not examine the applicant’s creditworthiness, and hence does not have to provide any documents. Thanks to this, the money can be reached immediately, and the decision usually waits a quarter of an hour from the moment of submitting a request for support. The form itself is extremely simple. The institution requires providing only basic personal data as well as contact details and expressing several standard marketing consents.

How do we get into debt?

How do we get into debt?

The problem of Polish society is low financial awareness and lack of knowledge about the basic mechanisms governing the market. Most indebted people have no idea who their creditor is and on what terms the loan or loan agreement is based. Fewer and fewer people underestimate the value of money and cannot dispose of it in a responsible and, above all, efficient manner. There are known stories that people who pay something in installments, when asked who they give the money to, say that to an electronics store, because they bought the goods there. This is an unpleasant, but very real picture of the Polish borrower’s awareness.

Lack of responsibility and the debt of Poles

Lack of responsibility and the debt of Poles

It is no wonder that the debt of our, especially the youngest, countrymen will grow. Along with the demand for services, the number of companies offering loans on favorable terms will certainly increase. Unfortunately, this usually leads to debtors falling into a so-called debt spiral. Young people have nothing to pay back the loan installments from, so they take another one that will cover the previous one. In this way, they impose a second obligation on themselves, which they will not have to pay back. This is a simple way to appear in the registers of unreliable debtors and problems with the bailiff. More and more lending institutions take the case to court, and the latter gives consent to enforcement, which very often leads to the loss of property.

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