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Borrower Support Fund – the first attempt to help borrowers in need

The Borrowers Support Fund will be launched at GFI at the beginning of 2016. Its establishment and functioning are regulated by the Act on support for borrowers in financial difficulties who have taken out a housing loan.

The fund, which will exist as part of Bank Good Finance, is to dispose of USD 600 million. Its creation will be financed by banks.

Establishment of the Fund

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The establishment of the Fund in the expected form is a compromise between the demands of Swiss franc holders and the scope of assistance that banks were ready to offer.

Finally, it was decided that not only franchisees but all borrowers who have problems with repayment will be able to count on help. This should be assessed positively, as this has avoided favoring one group.

And so, people paying back mortgages who are in a difficult financial situation will be able to apply for support in the amount of up to USD 1,500. USD per month (if the installment of the monthly commitment is lower, support will be reduced to this level).

The loan is repaid in a foreign currency

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If the loan is repaid in a foreign currency, GFI will convert the amount of the support installment into the currency of the loan repayment according to the sale exchange rate announced by the National Bank of Poland on the day preceding the day of payment of these funds.

The money will be able to be paid out for a maximum of 18 months and will then have to be returned. The borrower will have to return the funds obtained in this way within a maximum of eight years, thanks to the possibility of applying for the debt to be divided into installments. A nod towards borrowers is that they will pay back exactly the amount they have received because the return will not be interest-bearing.

Who can apply for interest-free assistance? The program is targeted at people who have lost their jobs (those who have submitted their termination notice or have been disciplinarily dismissed) will not benefit, as well as those whose installments exceed 60%. household income.

The bill was positively received by the banks. Admittedly, it imposes some obligations on them, but representatives of these institutions cited in the media emphasized that the creation of the Fund will have an undoubted advantage: it will raise the level of social responsibility of the banking sector.

The legitimacy of helping foreign currency loan holder

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They also hope that this will end discussions about the legitimacy of helping foreign currency loan holders because under certain conditions each borrower will be able to use the help.

The Swiss franc loan holders themselves are not exaggerated enthusiasts of the new regulation, because they expected (and even more: proposed specific solutions) something more, primarily the conversion of their loans.

The adopted proposal does not solve their problem, because the repayments are carried out according to the existing rules, and disputes with banks will still be resolved in individual processes.

The solution is, however, beneficial from the point of view of USD loan holders, because they were not excluded from the program. Restricting access to assistance because of the currency in which they took the loan was considered unreasonable and discriminatory.

Finally, the assumptions of the Act in the current formula are beneficial from the point of view of those citizens who have no credit or have no loan but have no problems repaying it.

Money for the existence of the Fund does not come from public sources, so they will not be charged to the budget, and they are also refundable, so no one will be able to claim that some borrowers got some gift from the bank – and it is known that banks do not have their money, so for help, all other customers drop off (in short).

We will find out in a few months how the Fund will actually work and whether it will fulfill the hopes it has placed. May his offer be directed to people who really need help and save them from the spiral of debt, which is easy to fall after the first installment not paid on time.

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