The non-profit organization People in Need compared the providers of thirty-eight personal loans in the Czech Republic. In the so-called responsible lending index, the lending company evaluates them according to fifteen parameters in the area of costs related to lending, transparency and customer agreement. The ranking is published twice a year and where companies have improved, for example in terms of information transparency.
The overall ranking divides consumer credit providers into five groups based on the different number of stars. Necessary people analyze individual businesses using fifteen parameters in the areas of credit costs, transparency, and customer satisfaction. It then combines the results of the individual parameters into an overall classification.
“Borrowing from a frivolous company is always the problem, but the consequences of a bad decision in the crisis we have now can be really devastating for people.
The high default price or excessive cost makes the loan a no-brainer. The level of supplier support is also becoming increasingly important. Once the legal deferral of payments ends in October, it will be up to each creditor to show the amount of understanding they will show to debtors who have problems with repayment, ”said Daniel Hůle, head of Debt Advice for Necessary Persons.
The ranking evaluates fifteen criteria from these three areas
- costs – how many people will pay for the loan and what the potential delay in repayment will cost
- transparency and communication – the scope and clarity of the information provided
- customer friendliness – the performance of the creditors before and after the loan
The responsible loan index has a loan model amount of CZK 50,000 and is repaid in the usual 12 monthly installments. As for the banks, in this case the interest rates range from ten to fifteen per cent; the largest non-bank companies provide about thirty percent.
However, there are also eight companies on the market, while loan applicants pay one hundred percent or more, while the two most expensive providers offer their loans at an interest rate of over two hundred percent.
People Needed – Responsible Funding Index – Fall 2020 Photo: Instead of a man
However, companies have improved over the years in terms of information transparency. According to David Borges, an author and author of People in Need, creditors gradually stop hiding sensitive information about their products and are more fair to customers.
According to him, there is still a long way to go. For example, although all conditions have been sent to the website by all companies, this is not the case with the contract. “The situation is absurd. The creditors want to sign the terms after the debtor and he has read them carefully, but they will show him the contract after he has given a sensitive
personal data, ”Borges said, noting that the behavior of lenders here is also better, with more than three-quarters of them already having contracts on the website, eleven of which do not, such as ČSOB or Komerční bank.
According to Borges, for example, companies are also trying to improve the quality of web calculators by allowing them to calculate their monthly payment in advance, and how much I will have to pay in total.
“So creditors are gradually doing part of the housework. Now it’s up to people to take advantage of that and know in advance what levels they can take. Unlike in previous years, they have the option with most suppliers now,” Borges added.
|Order||Supplier||Number of points||Number of stars||CZK price||The price of the loan||CZK delay||Non-payment costs|
|22||Faircredit||58.2||2||35848||Very high||29936||Very high|
|24||Financial support||57.3||2||39705||Very high||21453||Tall|
|25||Credit portal||55.9||1||35000||Very high||34360||Very high|
|26||Tommy Stachi||55.7||1||23946||Tall||30968||Very high|
|28||Prontopjčka||55.1||1||40771||Very high||36434||Very high|
|29||Provident Finance||54.1||1||24639||Tall||30849||Very high|
|33||Express Cash||52.6||1||36855||Very high||33761||Very high|
|36||Profi Credit||45.8||0||42634||Very high||38752||Very high|
|37||Center funding||37.5||0||70427||Very high||54419||Very high|
|38||Via SMS||35||0||95371||Very high||73381||Very high|