Banks’ attitude towards DAR-listed clients is changing. Are the banks likely to override their position so far because it is too easy to get on the blacklist? It is a bad thing for someone to be added to the DAR list because it will be stamped for years. Plus, it’s easy to get listed: enough to keep the minimum wage for 90 days.
We are currently categorized at banks
Even if we are not on the positive list of debtors. Hundreds of thousands of debtors are registered in the Central Credit Information System (KHR – formerly DAR list). If someone accumulates debt in excess of the National Minimum Wage and does not settle it within 90 days, he will inevitably be added to the DAR list in active status. If you settle your debt in the meantime, you will be registered as a passive DAR list for 1 year.
Even in the pre-crisis period, there were banks that gave loans to DAR listers, but nowadays the number of these banks is increasing, although they usually lend at a premium because of the higher risk. In fact, it is becoming customary for banks to categorize clients into different categories.
The categorization depends on several parameters
Such as the client’s job, income, marital status, age, education, and, in the case of real estate collateral, the value and location of the property. There may be up to 5 percent difference in interest rates between the first and last category. However, there are banks that do not categorize customers.
Most of the banks do not apply customer categories, but they can also lend to the DAR list at an additional cost. It is known that a positive debtor register has been launched a few years ago. Banks can join this list on a voluntary basis, and customers can sign up to sign up for their listing on the positive list. A significant number of retail lending banks have joined the initiative.
Personal loan to DAR listers
Due to bank tightening, banks have significantly tightened their access to credit, and the cost of personal loans has also increased. For personal loans without real estate collateral, both active and passive DAR listings can be a disincentive for banks.
Passive DAR Listers can also take out personal loans with some banks, but especially if they have had one past credit default, one loan, or consider how long someone has been in passive status. You cannot borrow a personal loan greater than five times the certified net income, and if the debtor is included in the credit transaction, the maximum amount that can be taken is eight times the combined income. Monthly installments on existing loans will reduce the amount you can take out.
Financing for DAR-list clients. Why do DAR-list clients finance real estate collateral only? If we start out on our own and give us credit without knowing anything about the customer other than being a bad debtor, what would we do? It could easily be that we would simply not give it a loan, or if we did, it would be in the form of a very high premium spread. Higher interest, higher APR, higher installments. We would try to make sure that our risky loan placement, even if you accidentally encounter a problem in that short period, still produce something. So, if someone is labeled as a bad debtor, or just brought about by circumstances, it may be the only bailout, the DAR-listed loan, with the right hedging support.