Certainly most of us have heard or convinced ourselves that getting a bank loan is not as easy as it may seem. It requires providing many documents and meeting strict criteria. It happens that young people, considering their financial situation as stable, go to a meeting with an adviser. After all, who of us does not dream of building our own house or buying an apartment? However, many consultations on loans for young people end in disappointment. The bank is interested not only in our income, but also in the form of employment, age, number of dependents, etc.
Mortgage for young people
Despite this, the popularity of housing loans is still increasing. In the first quarter of 2018, banks granted them up to 116 952 thousand. For comparison, a year earlier, in the same period, Poles contracted 108 519 thousand. mortgage obligations. According to data for March 2018, young people most often use consumer loans. They account for 68% of all liabilities. However, looking at how difficult it is to obtain a positive decision on a housing loan, it is surprising that people aged 18 to 24 have a debt of 2.2 billion on this account. How it’s possible?
Housing loan for young people
A great facilitation in obtaining a loan for young people up to the age of 35 was the Youth Flats Program run in 2014-2018. The last applications were to be considered in September this year, but there were so many interested parties that the funds allocated for this purpose were exhausted already at the beginning of January. However, this is not synonymous with leaving young people without help. What did the government offer in return?
Income threshold for beneficiaries of Flat na Start
- Single-person household – PLN 2,562.91 net
- Two-person household – 3,844.36 PLN net
- Three-person household – PLN 5,125.81 net
- Four-person household – PLN 6,407.27 net
- Five-person household – PLN 76,872.72 net
- Six-person household – PLN 8,970.17 net
The new program introduced from January 2019 is called Mieszkanie na Start. People who decide to take advantage of this offer have a chance to reduce the fees for renting an apartment. How it’s working?
The program is addressed to people who, fearing high fees, do not decide to rent an apartment. There are a few conditions you must meet to get help. First, the average household income cannot exceed 60% of the average salary. The exception is large families, in which each member increases the acceptable point by 30 percentage points. Municipalities will have an impact on whether we receive financial support and how much it will be. The subsidies will be available for the next 9 years.
As we read, people applying for participation in the Flat for Start Program will be required to complete the appropriate form and attach: a copy of the lease agreement, statement of restrictions on property, a statement motivated by special cases of subsidies, a statement about the number of people in the household, statement of income in the household for the given period.
Loan for housing for young people
The Individual Housing Accounts program will also be launched. Any private person will be able to open a special account enabling them to save their savings for housing purposes. There would be nothing innovative about it were it not for the fact that we receive a bonus for regular revenues at IKM. In addition, the accumulated capital will be exempt from Belka’s tax. This means that we will be able to save an additional 19%. However, we must remember that the shortest period for which we decide to transfer our savings to the account is 5 years. Only after this time will we be awarded a bonus. We can allocate funds from the account to:
- building a house,
- buying an apartment, house or plot,
- purchase of shares in a housing cooperative.
To use the above solutions, we will be required to complete the relevant documents. We will be asked to provide address, personal and contact details, number of dependents, monthly income, taking into account owned properties and their area, information on the intended investment and several others. Access to the Flat on Start Program is not subject to age restrictions.
A loan for young couples
What if we do not meet the requirements of government programs? In such situations, it is worth reviewing the available bank loan offers. Among them are lenders who do not limit their criteria. There is no doubt that it would be best for us as applicants to have an indefinite employment contract. However, the lack of it does not prevent our chances of receiving financial support from the bank. There are also solutions, such as a student loan, where you will only need a study certificate, a statement of the amount of income in the household, documents related to the loan collateral and a letter confirming admission to studies. In such cases, both the fees and the commission charged by the bank are kept to a minimum.
It is also possible to take advantage of cash loans, which are characterized by greater availability and less stringent conditions imposed on borrowers. However, it should be remembered that this happens at the expense of maximum funding amounts, which are much lower than for mortgage liabilities and with fewer installments.
Youth loan – an alternative
Non-bank loans are popular among people whose applications for a youth loan have been rejected or simply do not meet the requirements of the lender. Many consumers still identify loan companies only with payday loans. To some people’s surprise, installment loans are equally popular. Their maximum amounts reach up to PLN 35,000, and the repayment can be divided into up to 60 equal monthly installments. The advantage over bank loans is the fact that the entire application process is carried out online. We don’t even have to get up from the couch, all you need is a device connected to the network and a moment of peace. Some lenders guarantee you get the money you need, even within 15 minutes of issuing a credit decision.
What conditions should be met?
Installment loans are granted to Polish citizens who have permanent residence in it. In addition, a minimum condition is at least 18 years old. In some cases, the lower age limit has been raised to 21 years. What documents will we need? Loan companies limit all formalities to a minimum. To submit an application, simply:
- ID card,
- own bank account number,
- active phone number
- e-mail adress,
- basic information on income.
We encourage you to read the installment loans made available on the Ilya of Murom website. We leave our clients not only a comparison tool that will facilitate a quick review of products, but also detailed offer analysis, rankings and specialist advice.
A loan for young people – an alternative to credit?
A loan for young people can be a very good alternative to a loan from a traditional bank. When we decide to use the services of a company providing loans for young people , we can take additional funds for any purpose. When filling out the application, we will not have to enter what we intend to spend the money on, nor will we be asked to submit a confirmation certificate for the purpose of which the borrowed amount has been used. It would be different if we took a loan for young people in the bank. In this case, the purpose of the loan must be provided, and confirmations on what we spend all the cash should be provided regularly.
A common feature of both solutions is definitely the fact that we pay the entire liability in installments chosen by us. Their amount depends mainly on the loan or credit amount and the repayment length chosen. Usually, the requirements of banks regarding who can get a loan for young people are more stringent than in non-bank loan institutions. It may happen that our loan application in a traditional bank will be rejected for some reason. In this situation, if we really need additional money, we can take quick loans for young people offered by non-bank companies. Certainly, we will have a better chance of receiving the necessary financial support there.