There is a lot of talk about people who take out new loans just to pay back outstanding debts. We probably wonder how it is possible, if traditional banks do not accept insolvent customers’ requests?
Banks more cautious
The Polish Financial Supervision Authority, after the economic crisis that was several years ago, introduced additional collateral to banks. First of all, before traditional bank branches decide to grant a loan to a particular applicant, they must first check their creditworthiness and the repayment history of previous debts, if any. Therefore, all banks are obliged to cooperate with the Credit Information Bureau. This is where all the names of people who can become potential debtors or are already there are. If only such a name appears when determining the insolvent borrower, then of course, such a client will not receive a loan from the bank.
Loans without BIK in non-bank institutions
As many times as we would not have turned on the TV or browsed through various websites, we very often have the opportunity to come across the “Loans without BIK” commercial. In fact, the Polish Financial Supervision Authority has established that BIK is obligatorily required to use all banks. However, such a condition has not been imposed on other institutions, which also deal with the provision of financial products such as loans and cash loans.
Non-bank institutions do not have to and do not use BIK’s assistance although they have the option. If you do not know what’s going on, it’s about reducing expenses. Using the Credit Information Bureau database would entail additional costs.
If not BIK, then what?
It should be noted here that many non-bank institutions, apart from Wong, do not use the Credit Information Bureau in order not to incur higher costs of the financial services offered. However, they have their own ways to assess the solvency of the client fairly. Substitute sources of information are the Economic Information Office and the National Register of Debtors. However, they do not have such accurate information as in the Credit Information Bureau. Therefore, they bear a much greater risk by granting loans. Hence, however, a much larger commission and interest rate on debits take also. Because there are customers who take out another loan to pay off the previous one, or simply for consumption, without any intention of paying back their liabilities at all.