Credit based on earnings abroad – which banks?
Banks that grant loans to people working abroad
At least two banks in Poland are known to grant cash loans to persons working abroad. These are Meteor Bank and Pancor Bank. They are the only ones who boast of such a possibility. However, it cannot be said that other banks will not grant such a loan. It is best to use the loan calculator yourself, choose the most favorable one and ask for such a possibility. Unfortunately, it is impossible to check which bank gives loans to people working abroad.
The problem with cash loans for people working abroad results from the relatively low interest in this product – banks are not profitable in preparing a separate offer for such people, which does not mean that they are not able to prepare an individual offer for someone.
Cash loan for working abroad
Getting a loan for income from abroad is more difficult than getting a loan with earnings in PLN. People who earn in foreign currency are required to have higher creditworthiness and more detailed documentation of income. This is not surprising. The bank will have a limited capacity to pursue claims in the event of termination of repayment by a person earning abroad. The bailiff enforcement procedure between European Union countries is complicated and slow.
Living costs abroad are also higher, which means that high nominal earnings do not translate into such high creditworthiness as one would expect. In 2019, such loans were available in three currencies – Euro, British Pounds and US Dollars. Of these three currencies, it is definitely the easiest to get a loan in Euro.
Such a loan may interest not only ordinary people working abroad. Seafarers or freelancers working in Poland for foreign clients and earning income from abroad may want to enlist him. Also people working in the border area, e.g. near the Czech Republic or Germany, can count on the loan offer of the local banks – the place of residence is of key importance here.
Loan based on earnings abroad – requirements
It is not possible to predict what documents a particular bank will require for a foreign loan. However, there are at least a few formalities that are usually necessary to obtain such a loan. These are:
- foreign contract or contract – preferably translated by a sworn translator,
- tax return (foreign PIT),
- account statement for the last few months, of course from the account for which you receive remuneration,
- report from a foreign credit information bureau,
- check in in Poland,
- identity document – passport may be required.
Mortgage for working abroad – how to get it?
Real estate in Poland is cheaper than in Western Europe. In people earning in foreign currency, this may give rise to the temptation to buy cheap flats for e.g. rent with the prospect of living in it in retirement. This is a wise investment because housing prices and rental rates will probably rise. The cost of a mortgage in Poland does not differ from Western rates – in any case, the interest rate will result from the level of interest rates set by the central bank of the given country. Thanks to this, a loan in a currency other than PLN will often be cheaper.
Currently, the requirements of the Polish Financial Supervision Authority (Recommendation S) require that loans be granted only in the currency in which the borrower earns. So you can’t take out a loan in PLN if you earn in a foreign currency. There is one way to get around this obstacle – taking it with a co-borrower earning in PLN. However, there will be two factors lowering your shared creditworthiness. First of all, it will be equated to income in PLN multiplied by two. For example, if you earn in PLN 15 thousand. PLN, and your partner 5,000, your capacity will total 10,000 zlotys. Secondly, the bank will assume the possibility of zloty strengthening by 20%. Foreign income will be reduced by this amount.
A mortgage for people working abroad is available on more difficult than normal terms. The bank may require a higher down payment than the normal 20%, and the upper loan period may also be shorter – for example, 20 years instead of the usual 30.
After returning to Poland, it is always possible to convert the loan. The bank may have a lot to pay for such an operation, so it is worth asking about such a possibility in advance when negotiating a contract.
Due to the complexity of procedures and the time needed to obtain a mortgage for foreign earnings, it is worth considering using a credit advisor.
Despite difficult procedures and high financial requirements, this loan remains the only option for people earning a loan in Poland to buy real estate in Poland. A foreign bank is not able to mortgage Polish property.
Foreign Credit Information Bureaus
When granting a cash loan for income from abroad, the bank may want to check the local Credit Information Bureau, which is the equivalent of the Polish BIK. There will be no problem with this – these institutions have signed agreements on cross-border information exchange. To check someone’s credit history, the bank must have permission to do so, but without it it will definitely not grant credit.
Apart from them, there is ACCIS, i.e. the Association of European Credit Registers, whose task is to support the creation of the widest possible system of credit data exchange. Thanks to ACCIS, Polish BIK can even cooperate with offices with which no cross-border information exchange agreement has been signed.