A holiday can make a proper draft in your wallet. Many people think about it in advance and save. And who does not have savings, often solves the holiday through a loan. More information at chattmag.com
Loans can turn into a debt trap
According to surveys, one in four people in the Czech Republic wants to solve this recreation this year. But experts warn: Loans can turn into a debt trap.
Holiday is one of the most common reasons why people borrow money. But it often flies. “During the holidays, people are under greater pressure to raise money. At the same time, their ability to assess the risk of the loan is being reduced and they negligently sign disadvantageous contracts, ”experts point out.
People often pay off a holiday loan for many years or even fall into a debt spiral. “Almost two percent of people get into financial difficulties because of repayment of the holiday loan,” adds the expert.
Therefore, it pays to clarify what to do before arranging a loan.
Think about the loan
Do you really have to borrow for your vacation? The thing bought on the debt should last longer than for which you repay the loan. What if you could explore the beauty of the Czech Republic instead of the sea? It will be cheaper.
Follow the APR
Do not hurry and nod to the first free loan you encounter. If you want to assess the advantage or disadvantage of the loan, follow the APR, ie the annual percentage rate of charge. This includes all costs associated with the loan.
Calculate how much you will overpay
Do you find the APR too complex? So ask how much you will overpay. “I have to calculate how much I will overpay the loan before I take it, and I must not lament after I signed the contract,” explains Sean Cole from the Good Finance.
Ask about fines
Find out what sanctions are in the event of delays or defaults, and whether you can change the conditions (such as the amount or deferment of installments).
Carefully with signature. Don’t sign anything automatically
Read the agreement thoroughly, ask anything you don’t understand. Don’t be shy about asking for time to think. It pays to see a comparison of loans.
Czechs and loans
* Every second Czech has a loan.
* Repayments do not apply every eighth.
* One in ten Czechs borrows to repay their debts from the past.
* Up to 75 percent of loan applicants are under 30 years of age.
Statistics of the Non-Bank and Banking Register of Client Information for the second quarter of 2019 indicate that the total volume of debt of the Czech population increased to USD 2.38 trillion. On the other hand, the total amount of outstanding debt is decreasing, with people paying off both short-term and long-term loans better.
Holiday in numbers
* 73 percent of Czechs want to go on holiday this year.
* They plan to spend 17 thousand crowns on average.
* Almost 1.8 million economically active Czechs save on holiday.
* Every fourth is considering a vacation loan, often non-bank loans
* Most people borrow from banks and acquaintances