Loans at risk increased in 2023. How to decrease risk?
Even though default has decreased throughout 2023, risky loans have increased. Check out the numbers and learn how to reduce the risk of defaulting on your credit.
Do you want to lower the monthly installment of your credit? The credit intermediaries from Poupança no Minuto can help! Contact us now.
Loans at risk increased by 2.2 pp in 2023.
According to the Financial Stability Report of the Bank of Portugal (BdP), in 2023 it can be concluded that there was an increase in loans at risk, mainly related to the indebtedness of poorer families.
The data was released by Notícias ao Minuto and shows that, although there has been an increase in loans with deteriorating credit risk, the default credit ratio continued to decrease in 2023, from 3% to 2.7%. This is due to the maintenance of employment and income of families, as well as the renegotiation of loans and government support measures.
The ratio of loans to individuals at risk increased by 2.2 percentage points in 2023, to 10.4%, as a result of variable-rate housing loans. This "reflects an increase in credit risk associated with the higher debt service burden on the income of more vulnerable families," according to the BdP as reported in the news.
Note that the risk is attributed to credits that are not yet in default, but in which there are signs in the client's financial situation that this may happen.
"It is important to ensure that the increased resilience of the Portuguese banking sector to any shocks takes on structural aspects, allowing for the adequate remuneration of depositors and shareholders and the necessary effort to adapt to emerging realities," quotes the news about the Financial Stability Report.
How to reduce the risk of default on credit?
Are you having difficulties meeting your monthly credit installment? Know that you can achieve greater flexibility in your budget by resorting to financial solutions that help you save on this product.
The first step is to go to your bank so you can request a renegotiation of the conditions in your contract. The financial institution may offer a lower spread in exchange for hiring other products associated with credit such as a credit card. But you should always do the math to understand if the savings in the installment is worth it.
If you are not satisfied, you can resort to transferring your credit to a different bank. In the case of mortgage credit, you may be able to access more advantageous conditions, such as a new interest rate regime: if you currently have a variable rate, you can switch to a mixed rate, which allows you to fix your rate (there are bank campaigns with lower fixed rates than current Euribor rates), returning to variable when it is predicted that Euribor rates will fall again.
You can also consider transferring the insurance associated with housing credit to a new insurer: if you have the insurance with the bank's partner insurer, you may be able to get better conditions and at a lower cost with another insurer. The bank may penalize your spread, but the savings you can achieve with insurance from another insurer can more than compensate for the penalty. URL: transferência dos seguros associados ao crédito habitação
These are some options you can use to get a lower monthly payment on your credit and reduce the risk of default! And know that these processes are much easier if you are accompanied by a credit intermediary like Poupança no Minuto.
The agents of Poupança do not charge any cost for their service and handle all the paperwork for you! One agent will be with you throughout the process, from start to finish, helping you compare the various proposals and choose the most advantageous one. Contact us and start saving now!