Is It Harder to Get Credit Now Than a Year Ago?

Possibility, soon it will be difficult to get a loan from a bank. Let’s look at this question in detail.

More recently, conversations on the topic of the population’s debt burden were very relevant. Many people succumbed to the temptation to get several loans at once without really understanding how credit organizations work. As a result, loan servicing has become a heavy burden for many people and has become a serious problem. Moreover, the percentage of low-quality loans grew not only for the borrower but also for the bank.

New requirements

New requirements changed everything. Their tightening forced credit institutions to seek stability and strengthen their positions. But an ordinary citizen who wants to get credit now does not care much about such issues.

Will borrowers be able to get loans without any extra effort?

According to the NBKI (National Bureau of Credit Histories) recently, it was almost impossible for a bank customer with several loans to get a new loan. As a result, the percentage of borrowers repaying several loans at the same time almost did not increase. Thus, at the beginning of 2020, the share of the bank’s customers servicing two loans at the same time was about 10%, three loans – about 4%, more than four – 2.5%, and these indicators remained virtually unchanged during the year.

Number of credits

At the moment, the level of the population’s creditworthiness is quite acceptable. In addition, banks carefully check their potential customers, as a result of which getting a loan is not an easy task. At the same time, the situation when the client uses several credit products at the same time is quite normal. Most often, this is a personal loan and a credit card. In addition, recently, there is an increasing trend when a client takes out a new loan to pay off debt on an existing loan.

Many borrowers have multiple loans at the same time. A large proportion of borrowers have multiple loans. Usually one of them is large, such as a car loan or mortgage, and the second is used for everyday expenses, most often a credit card. A considerable number of borrowers with more than two loans is explained by the psychological dependence of some people to get money again and again immediately and without extra effort. But sooner or later all debts have to be paid back.

Analyzing the information received from Credit Bureaus, we can say that since 2010, the number of customers with a credit history has increased from 50% to 70%. At the same time, during the same period, the number of active loans per bank client increased exactly twice. Most of all, the number of credit card holders has increased over the past 10 years – from 10% to 25%.

What is the outcome?

The situation is not so critical. Of course, you should recognize that certain problems with servicing loans still exist, but it’s within the norm. Do not forget that at the same time, banks have become more attentive to new customers. This means that people having several loans at the same time can unlikely to get a new one, and any suspicion of their insolvency can lead to rejection.

Banks are always looking for responsible clients

The bank is always looking for responsible customers who have no difficulties with credit payments. If you have a good credit history and you have never contacted collectors, then you have every chance to get a loan on good terms. Banks appreciate high-quality borrowers. If you have never used the services of credit institutions, then it will be valuable advice to always adhere to financial discipline and not to collect new debts as long as your income does not allow you to be confident in your own solvency.