Wednesday 5 October 2022

Historical inflation and rise in interest rates would increase delinquency

Since the pandemic began, financial institutions have offered various payment arrangement programs. Hiding and not paying has a high opportunity cost for debtors, according to experts

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05 October 2022 - At The Banks - BCCR

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QCOSTARICA – The increase in interest rates, as well as the impact of the highest inflation of the last 13 years, would soon translate into greater delinquency, according to experts.

However, if you are one of them or in danger of falling into this condition, you must remain calm and remember that the opportunity cost of hiding and not paying has a high price at the end of the day, which is why various financial advisers recommend approaching the respective financial entity and reaching a payment agreement.

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Longer terms, consolidation of debts and paying off the debt without interest are some of the options that you could take to give your finances oxygen, since banks and other entities have been implementing various programs since the Covid-19 pandemic began in 2020.

At the moment, it is not clear how much delinquency has risen in the financial system, since it is an evolving percentage and has not finished reflecting the impact of the exchange rate, gasoline, the cost of living and other variables.

In any case, debtors should know that putting all debts in the same basket will allow them to negotiate at a lower rate and recover liquidity.

In that sense, to obtain a loan in better conditions, it is advisable to take care of your credit record and avoid falling into legal proceedings at all.

“Financial entities must make adjustments that can influence the dynamics of consumers and avoid problems at the country level, but above all personal and family problems, therefore, debtors are recommended that in case of any pressing economic situation, they approach to financial entities and establish agreements that avoid consequences such as bad credit references due to non-payment”, said Elizabeth Morales, Assistant Manager of Coopecaja.

Review and understand the characteristics and contractual conditions of your current loans: if the rate is fixed or variable, what factors affect this rate, term of the loan, among other conditions, must be extremely important for debtors.

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Delinquency affects the entire financial system, since it can cause a deterioration of indicators.

“During this year, in Coope Ande, 1,800 payment arrangements were made and associates who present diverse situations in their debts were benefited. We urge them to approach the agencies, as well as through the call center, to expose their situation and analyze options that allow continuity in their payments, while avoiding, in turn, staining their credit history in the national financial system,” assured Adriana Cordero, Manager of Credit and Collection of Coope Ande.

Mari Jose Acuña, Senior Manager of Retail Credit Products at Scotiabank explained that client can choose to extend the term of the loan and thus obtain a reduction in monthly payments. During the months that have elapsed from this 2022 we have carried out 42 refinancing.

Scotiabank has the colonization option for housing loans, pledges and leasing that were formalized, at the time, in dollars. Likewise, for housing loans, and after analysis in accordance with the internal policies of the bank, the

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Esteban Jimenez, Director of Personal Banking at Davivienda, said they are committed to supporting their clients in difficult times, for this reason, their executives and advisors provide personalized advice to find the solution that best suits the client according to their financial situation. In the case of debts in dollars with Davivienda, when establishing the automatic payment of the loan, customers can access a preferential exchange rate.

People who manage to reach a payment arrangement should remain calm by having more money and value saving.

According to the experts, debtors have to worry about maintaining a clean credit record, since not paying has a high opportunity cost.

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