Among the Czechs, Christmas loans are popular, they borrow much more often than in other periods. But indebtedness for unnecessary things is not very reasonable. Although the new Consumer Credit Act introduced a regulation in the form of a stricter assessment of creditworthiness, the current survey of the Chamber of Executors of the Czech Republic shows that some people borrow repeatedly for Christmas, while in the past they faced execution. Therefore, always consider carefully whether you will be able to repay the commitment and, above all, avoid using dubious offers that are full of Christmas before Christmas and which promise quick help.
People borrow repeatedly for Christmas
In November, the Czech Chamber of Executors conducted a survey on loans associated with Christmas. It showed that the number of people considering the loan fell by 6% y / y – from 19% to 13% last year. Although this is a favorable trend, the high proportion of people borrows Christmas repeatedly despite the fact that they have had problems with payment ethics in the past and even faced execution. However, the Czechs have the desire and desire to diversify their Christmas, indulge in something more and make themselves or their loved ones happy. According to experts, the trend is reflected in greater interest in loans than in other months. “In November and December, demand for consumer credit is increasing for all lending companies. If the client chooses a provider that thoroughly checks its creditworthiness, the risk of being unable to repay is minimal, ” says Robin Stránský, marketing manager of TOMMY STACHI, a Czech company that provides fast and secure consumer loans. “The average number of applications for non-bank financing in the Christmas period is 2-3 times higher than during the year. The amount of borrowed loans is also rising, although there is generally less dramatic growth, ” confirms David Bouda, Chairman of the Board of Directors of the Association of Non-Bank Credit Providers.
Be sure to choose a provider
Just like holiday loans or new electronics, pre-Christmas loans are in most cases superfluous. “People should continually create a financial reserve for planned and unexpected expenses. After all, if they want to get into debt, it is important to consider whether the repayments will not disrupt the payment of usual expenses, such as rent or energy, ” warns Miles Stephanie, CFO of Astro Financial Group. If you want to apply for a loan, be sure to take some time to think and avoid offering untrusted companies that promise quick help before Christmas. According to the Czech Chamber of Executors, some companies and usurers even provide loans without a contract. Definitely avoid any providers or intermediaries who have failed to comply with the new terms of the Consumer Credit Act. “Previously anyone could offer loans. However, the new law has reduced the range of providers and intermediaries considerably. Therefore, on the CNB website, everyone should check in the list of regulated and registered entities whether they have anything to do with an entity that has already received or has applied for the relevant license, ” adds Miles Stephanie, CFO of Astro Financial Group.
Take advantage of the loan offer
In terms of financial literacy, Czechs still have some reserves to understand the credit supply. According to the law, the APRC is a decisive figure used to compare the advantageousness or disadvantage of loans. It is on an annual basis so that consumers can easily compare all financial products, both short and long term. However, it has to be taken into account that even the APR mentioned in the contract may change on the basis of extraordinary repayments, which may be the early repayment of the loan. Action offers on credit-repaying loans are another example where multiple factors need to be taken into account. The real cost of the loan will be reduced by meeting the conditions for receiving the rewards. “We are currently returning a quarter to 100% of the interest paid back if the client repays properly and on time and pays the loan early in the 12th installment. However, at the outset, the APR does not reflect the fact that the client gets interest back, ” explains Robin Stránský and recommends that consumers have a representative example calculated directly on their financial situation, including an example of using an action offer.