Today in Hungary, almost half a million people work as private entrepreneurs. This is a very serious figure and not only in the labor market, but also in many other ordinary places and situations – such as credit administration. Surely the question arises whether you are engaged in individual entrepreneurial activity, whether you can take out a Personal Payday Loan if you need it.
In general, for example, in advertisements and advertisements, we can find the conditions that affect most, that is, the conditions for employees. But it is clear that banks are also preparing for special cases and are developing special rules for them. In our article, we discuss whether you can obtain a Personal Payday Loan as an individual entrepreneur, and if so, how the application procedure differs from known and usual ways.
A Personal Payday Loan is the most risky loan for a lender . While there is a collateral behind a mortgage that makes it safe – for example, think of a home loan where a pledge is registered – there is no behind the Personal Payday Loan, and the claimant can use it arbitrarily, and you can use it for any product or service.
Consequently, if the debtor would not be able to repay his debt for any reason, it would be much more difficult and costly for the lender to get his money (which is actually the money of his depositors). This risk is priced by the higher interest rate level, so they try to minimize the risk with guarantees of repayment reliability by filtering out bad debtors. Of course, it is also in the interest of the claimant, as it is also disadvantageous for him to be unable to pay properly.
The most common such guarantee is the expectation of a regular, stable income that ensures that the debtor will be able to pay the installments. Banks’ offer depends on what their verifiable income is, as this is the main aspect of reliability. It is taken into account that repayment is not a problem, so they maximize the ratio of repayment to income (usually more stringent than the 50% statutory requirement).
In the case of an employee, all the time with an existing, stable job, and a certificate of income provided by the employer, can rightly assume that the debtor is likely to be in a similar situation during the repayment period. Of course, there may be an unexpected unfavorable development for employees as well, but the exposure and risk for individual entrepreneurs are much higher, because the conditions are less predictable. Therefore, the bank expects somewhat stricter or other types of certificates than an employee.
Thus, banks also provide Personal Payday Loans to individual entrepreneurs, and the procedure does not differ much from the usual business. The difference in procedure is usually only in the form of an income statement, given that the self-employed person would be able to issue a certificate of income at most. However, according to the regulation, however, self-employed persons need an income certificate issued by NAV. In many cases, the bank acquires this from NAV.
Further stricter conditions for self-employed workers are that they must have been engaged in entrepreneurial activity for at least 12 months prior to the application and not be publicly liable at the time of application. In the latter case, particular care should be taken, since it applies not only to private entrepreneurial debt but also to the failure to meet private obligations (eg social security contributions). Public debt relief must also be certified by a document issued by NAV.
There may be discrepancies in the requested documents per bank (such as account statements), but otherwise the terms are the same as for employee status. Even in the case of earnings that reach the minimum wage, you can also borrow a Personal Payday Loan, but of course a much lower amount than a higher income. Individual entrepreneurs are also subject to the restriction on income-related repayment of indebtedness.