Unfortunately , Hungarians are not well-informed in finance , so this can cause some inconvenience, for example, when borrowing. What’s sadder is that many banks are abusing this. In recent years, the MNB has looked into the terms of a home loan agreement with some banks and found something that could be considered unfair in a lawsuit. Shopping card shops and merchandise loan agents can also cause a lot of trouble. Hungarians are financially vulnerable, which is due to their ignorance.
Hungarians are financially vulnerable
Rose Bank inspectors found several errors in providing information to banks, especially on home loans. Banks, insurance companies and other money market institutions have received a lot of complaints from retail customers. The MNB’s investigation has found that it is still common for banks or insurers not to provide adequate information to a client before entering into a credit agreement. Most often, information about surcharges and prepayments is omitted. There are also many problems with the choice of insurance rules for home loan contracts, unjustified withdrawal of interest rates and unnecessary overcharges. A recurring mistake for mortgage lenders is the inadequate representation of the APR and the representative credit example, as well as the incorrect calculation of the APR.
Other surveys also revealed other problems. Large chain stores do their shopping cards repeatedly. With regard to credit cards sold as shopping cards , the MNB launched several targeted investigations, which found that the products advertised as shopping cards were in fact credit card products, so the information provided by the stores was inadequate. It has been prohibited by law since late 2015 to offer credit at product launches, but to no avail because several agents are trying to do so.
Lack of awareness
In Hungary, 3-8% of borrowers are over-indebted and 15% are financially vulnerable. That is, if an unexpected event causes the household’s financial situation to slip out of the ordinary, they may be in trouble with installment payments.
The less conscious one is, the more vulnerable he is financially. In order for a household to become financially stable, it does not necessarily have to make more money, but it is also a great help to get better financial education. It is worth reading the publication of the MNB, which deals with financial awareness education.