Is it possible to apply for instant credit with bank problems?

Need additional financing to pay off a debt that is starting to get out of your control? Find out what solutions exist for those who need immediate credit with banking problems.

Even though the state of the Portuguese economy seems to have some stability, there are still several families that, due to some unforeseen event, such as unemployment for example, end up in a spending cycle and are forced to ask for immediate credit in order to pay off their debts.

If you have bank problems and your name is already on the Bank of Portugal's Black List, your credit application will most likely be rejected! This is because financial institutions cannot accept new applications for financing if there are already problems reported to the Bank of Portugal.

Still, exceptions can occur, let's get to know them!

I have bank problems, can I apply for a credit?

Yes, you can. However, in most situations, when they are complex problems, the credit request is refused. But it will all depend on the credit approval criteria adopted by each financial institution.

There is a financial institution that can, in some cases, grant financing, even if you are already in default. Still, the entity in question, Banco BNI Europa, has some conditions that must be met, among them:

• You cannot be in default for more than 3 months;
• The amount owed to the Bank of Portugal cannot exceed 750€.

Ideally, you should always try to avoid a default situation before it happens.

How does the bank know I am in debt?

Before a credit application is approved, a detailed analysis of the potential risk that the consumer may represent to the financial institution is required. To do this, it is necessary to present your Credit Liabilities Chart, a document that contains your credit history. This document is fundamental to identify all the charges you currently have and if you have ever defaulted.

Keep in mind that the Bank of Portugal Black List shows overdue credits up to 20 years. So, if you have a credit that defaulted in 2005, it will remain in your Map of Responsibilities until 2025, for example.

You may request your Map of Responsibilities from the Bank of Portugal, in the area intended for Citizens. Click here!

How to apply for credit, even with bank problems?

If you can't avoid default, know that there are some solutions to resolve your situation.

The most common solutions for applying for credit, even with bank problems, include:

• Resolve the existing delays by paying off the defaulted installments.
• Reach a payment agreement with the bank, or other financial institution responsible for the credit, in order to resolve the default situation. This may mean renegotiating the debt and extending the credit term to lower the monthly payments.
• Present a guarantee for the credit, such as a mortgage on your house or car, for example. Be careful, however, because if you choose this option and are unable to pay, your assets will be held by the bank.
• If you don't already have one, you can add a second holder to the credit.
• Having a guarantor, who takes responsibility for the debt in the event of default.
• Opt for a consolidated credit. This way you can combine all your debts and reduce your monthly payments by up to 60%.

What is Consolidated Credit?

Choosing to apply for a consolidated credit is often seen as the ideal solution for those facing banking problems.

Consolidated credit is usually the best option for those who have several credits and need to get money immediately to pay debts. This method allows you to combine all your loans into one, paying a single, lower monthly payment. In this way, you will have all your payments consolidated into one and you will be able to pay your debts in a way that is more comfortable for your wallet.

However, this solution implies an increase in the payment term and a consequent increase in the amount owed. But you can still get a financial break, since the single monthly payment can be up to 60% lower than the previous ones.

Keep in mind that the maximum age to apply for credit consolidation is 75 years old, and you may need to have a guarantor or provide some collateral to the bank, such as a mortgage on your house.

We recommend that you request several simulations of consolidated credit from different entities, so that you can choose the most suitable option for your case.

How to avoid more banking problems in the future?

There are several procedures that you can try to adopt to avoid falling into a default situation.

To be able to avoid bank problems in the future, you should first analyze your budget and identify where you can save money.

Often, by renegotiating the contract for electricity, gas, or telecommunications, we can save money that can be essential to prevent future problems in paying credits.

If you can ease up on your spending, you may also be able to reduce the need to ask for immediate cash to pay off any bank debts that you may have overdue and are suffocating you.

And, don't forget, always analyze your effort rate, so that you can evaluate the weight that credit responsibilities have on your income, and understand how far you can go.

In most cases, the effort rate should not exceed 35% of your net income. Only then will the financial entity be able to approve and proceed with your credit request.

Also watch out for fraudulent offers. In situations of greater distress, many consumers end up opting for attractive deals with unregulated entities or choose private loans, and end up being victims of fraud. In these situations, you will have no judicial support to defend yourself, since a private offer is not regulated by the Bank of Portugal.

The Domusvenda Group works with a wide variety of service providers and has a solid network of specialized companies with many years of experience in the Distressed Assets market.