People who have borrowed loans have grown. Yet the volume of borrowed money is constantly increasing. However, more and more Czechs are becoming interested in how to tame their loans through refinancing or consolidation, allowing them to get loans under control and relieve the family budget. This is confirmed by banks, which have seen an unprecedented increase in these products.
Refinancing or consolidating loans
Although the possibility of refinancing or consolidating loans is not a novelty in the offer of Czech banks, these products have recently been booming. “On the market, we see the change in the last two years, when people began to refinance and consolidate their existing loans as an opportunity to save money in the domestic budget,” says Pyla Rizona, a financial specialist for the SavingsMe portal.
According to the OneLoan Bank survey, almost half of Czech borrowers are considering consolidating or refinancing their debts. What is behind this growth of interest? As a result of the long-term increase in Czech indebtedness, banks are beginning to introduce these products more. Competition of young banks, which are lowering the price of loans, is also recording the situation.
Enfors bank credit product director Audrey Hems believes that the success of the consolidation product that the bank has recently introduced is also possible to solve everything quickly and from the comfort of home via the Internet. “In the first three months of the sale, we have consolidated Czech consumer loans with a total volume of several hundred million crowns, which exceeded our expectations,” headds.
Other banks are reporting extraordinary popularity with consolidation and refinancing. For example, in Asume banks, the refinancing ratio in total lending has increased by 70 percent over the past two years, accounting for 30 percent of all lending. In Sberbank this year consolidation has even become the most sought after credit product at all.
And what are the main advantages of consolidating and refinancing loans?
- Savings : One management fee instead of several different credit providers.
- Easier repayment : One installment term is easier to track than a few in a month.
- Less financial burden : The resulting installment may be significantly lower than the sum of the original monthly liabilities.