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Loans against real estate collateral are a product still enjoying relatively low popularity among consumers in the Polish economic reality. Experts agree that there are at least two main reasons for this.

The first of them is simply the lack of reliable, substantial and adequate in relation to facts knowledge about what they really are and how loans for a house or flat work. The second reason is the large number of myths, misrepresentations and stereotypes associated with loan products of this kind.

What are the most common stereotypes about services such as mortgaged loans? How do these stereotypes relate to the real state of affairs? Let us take a closer look at this issue.

Loans against real estate collateral: common stereotypes

Based on various types of data, at least a few of the most popular and most common myths and stereotypes about loan products, such as broadly understood loans on pledge, can be mentioned. Here they are.

1. loans against collateral are risky

In this case, we can conclude that the quoted belief has a psychological justification. Finally, a customer who decides to take out a loan against collateral for a house or flat he or she owns is indeed 'putting his or her property on the line'. Nevertheless, the alleged "riskiness" of mortgaged loans is only an excuse. Such loans have much more attractive financial terms and conditions than the standard type of loan service. There are therefore very visible differences in parameters such as interest rate, repayment term and maximum loan amount. The practice also contradicts the stereotype of the riskiness of pledged loans: the facts show that customers opting for this variant of loan products not only significantly reduce the costs associated with debt, but are also much less likely to fall into a so-called debt spiral or experience problems with the timely repayment of their debt.

2 Banks and lending companies do everything they can to take away a client's property.

This is another common myth about solutions such as pledged loans. In fact, a reliable lender does not in any way want to deprive a customer of his or her home or apartment. Reason? First of all, it is complicated from the formal point of view and also long-lasting. Secondly, it is a way for the lender to make its reputation worse. Of course, you should read the signed agreement carefully and carefully check the status of your lender before selecting one. In the case of loan companies, the database known as the National Register of Loan Companies, which contains all legally operating loan companies on the Polish market, will be helpful here.

(3) Pledged loans are a product designed only for people with problems

That's another myth. Indeed, because of their attractive interest rates and, consequently, the possibility of a significant reduction in the cost of debt, solutions such as mortgaged loans are particularly recommended to consumers with financial problems. However, also healthy customers should consider this variant of loan products: interest rate differences between loans on pledge and other types of loans are really significant and often save up to several thousand zlotys a year on debt service costs alone. By borrowing against a pledge, the duration of the loan and the maximum amount of the loan can also be significantly extended.