There is a common belief that seniors are afraid to use the services of financial sector institutions, much less loan companies. Nothing could be more wrong. According to reliable data, people over 50 are one of the most numerous groups using short-term loans on the Polish market. We check why, how and for what Polish seniors borrow.
Seniors are still active in credit terms
As a result of the demographic decline, Polish society is aging. As a result, the domestic financial market is also changing. According to research the Credit Information Bureau (BMK), about 45 per cent. Poles aged over 65 are still active in credit terms , and among all persons using cash loans, seniors account for 18%. this group. According to the BMS research institute, most people over the age of 65 are not satisfied with their finances. Despite the indexation of pensions in 2018, the benefits provided in this regard leave much to be desired.
Commercial banks are setting limits
The reality is that Polish pensioners most often have problems getting a loan from a commercial bank, despite the guaranteed stable monthly income. The banks’ reluctance to grant loans to seniors is most often dictated by the too advanced age of such clients, possible health problems that may arise in them, and the death of a senior before he can pay off his debt. Polish commercial banks most often set an upper age limit when granting loans that adhere strictly, thus preventing many Poles from using this type of financial product. The salvation for seniors are companies from the non-banking sector whose lending policy is more liberal.
Senior is a “solid company”
According to many opinions of representatives of loan companies operating on the Polish market, seniors are a “reliable company” because they are loyal and reliable clients who in the vast majority of cases pay back loans taken on time, and very often also earlier than provided for in the loan agreement. In large part, loan companies increase the upper age limit for people applying for a loan, up to 80 years.
Rather, traditional forms of borrowing
Most Polish seniors who decide to take short-term loans most often give up such services offered via the Internet, mainly due to their inability to use new technologies. Their preferred form of entering into a loan agreement is usually a personal visit to a stationary branch of the company or using home service. The average loan amount for seniors is PLN 1,250. They spend the most money they receive on current expenses, home appliances / electronics, small repairs or gifts for loved ones.
A large percentage of people over 55 are more likely to use installment loans than short-term liabilities . This is dictated by the fact that it is much easier for such people to pay off a small installment amount, even if it will be charged with higher borrowing costs, than to pay a few hundred or even several thousand zlotys once.
Seniors for the non-banking sector are a very valuable and desirable group of customers primarily due to their loyalty, timely repayment of liabilities and stable regular income. Due to the frequent exclusion of such people from the offer of commercial banks, loan companies operating on the Polish market are most often the only alternative for seniors to repair their home budget and live a dignified life.