According to CSO estimates, over 2 million Poles are already working abroad. Theoretically, due to higher income, they should not have a problem with getting a cash or mortgage loan. Unfortunately, this is not so simple, the Polish banking services sector does not have much to offer to people working abroad
Credit for working abroad – is it possible?
Although more and more Poles work abroad, hardly any bank offers loans to this group of customers. First of all, not every financial institution will accept income received abroad (for some banks it will be $ 0). Secondly, as a result of the Recommendation S introduced by the Polish Financial Supervision Authority, we can only apply for a mortgage in the currency in which we receive remuneration. The recommendation introduced is the aftermath of the so-called francs who are still a serious problem for the state and … banks. By refusing financial support to people working abroad, banks are trying to minimize the credit risk associated with exchange rate fluctuations.
Unfortunately, the loan for working abroad translates into more formalities that the future borrower must complete. A loan in a foreign currency means that it will be based on a different interest rate. Thus, when applying for a loan, we must take into account the risk associated with the difference in the currency exchange rate in which we take the loan and the value of the zloty in the future. This, in turn, makes banks approach our creditworthiness much more rigorously than for loans in native currency. Another difference concerns the amount of own contribution – for “normal” loans it must be 20% of the property value, for loans in foreign currency – it is already 40% .And so, a person working abroad must demonstrate longer continuity of employment than a person applying for a loan in dollar .
Currency conversion costs
Documenting income, which is one of the conditions for obtaining a loan in this case, is not so simple. Most employers do not want to pay for foreign transfers and incur additional costs. In addition, checks are a popular form of payment in some countries. If this is how we receive a “salary”, then unfortunately we will not be able to boast about regular payments to the bank account. What’s more, even if we belong to those lucky ones who receive money to their account, another problem is related to the conversion of foreign currency into dollars. Bank rates are rarely favorable. In addition, banks mainly operate on four basic currencies such as the euro, dollar, British pound and Swiss franc. What should borrowers who receive remuneration in a different currency do? The bank has nothing to offer.
Theoretically, the procedure for applying for a loan for working abroad does not differ much from applying for a “normal” loan, but it practically requires more documents and certificates. People who get a salary in euros have the best chances of getting a loan. Those who receive remuneration in a different currency of the loan are unlikely to receive.
A person working abroad wanting to take out a loan must prepare the following documents:
- contract, contract (including seafarer’s contract);
- statement of income entering a bank account – in addition to the employment contract and contracts, income from pensions is also taken into account; income earned as part of running your own business is not important);
- Annual closure;
- account statement documenting receipts in the last 3 months (or longer);
- report from the local Credit Information Bureau (relevant Polish BIK);
- other documents (if required) such as a permanent residence permit or work permit.
We will get a report from the Credit Information Bureau in countries such as Germany, England, Belgium, the Netherlands, Ireland and France. In addition to gathering relevant documents, we must also take into account the costs of translating each of them. Can it be avoided? Unfortunately not, but you can reduce the costs involved. First of all, it’s not worth looking for a translator in the country where we work. The prices of such services are much higher than in Poland. Due to the more complicated credit procedure, it may also be necessary to visit a branch of a Polish bank. And this if we are abroad, it means additional difficulties and … additional costs. If we cannot afford regular visits to the country, we will appoint a representative who will complete all formalities on our behalf.
Getting a loan for people working abroad takes about two weeks. A lot depends on when we manage to collect the necessary documents and deliver them to the bank. The sooner we do it, the faster we will get a credit decision.
Loan for working abroad. Summary
Getting a loan in a foreign currency is a complicated and time-consuming procedure. Loans to people working abroad are rare on the Polish financial services market. Even if such an instrument is offered by one of them, it is unrealistic to receive financial support. This does not mean, however, that such people cannot use loans at all. They must “only” enlist him in the currency in which they earn. The offer of such loans (especially mortgage loans) is limited, hardly available and more expensive than in the case of loans in dollar .
The solution to this situation may be applying for a loan in your native currency together with the person who earns in dollar . However, we should remember that in this case the co-borrower’s income will be the most important. And it is for him that the bank will calculate its creditworthiness. In turn, the bank will receive the income abroad only up to the salary of a person working in Poland.