Loans

In the Hungarian retail and SME lending system, we basically distinguish between three types of loans.

1. Mortgage loans (the property serves as collateral for the loan) These can be for real estate purposes or for free use.

2. By unsecured residential loans we primarily mean personal loans, and currently the baby loan also belongs to this category as a state-supported unsecured loan. It can be granted without real estate collateral, based only on the net income of the applicant(s).

3. Corporate loans. This also has several forms, there are subsidized loans (e.g., Széchenyi loan, Széchenyi card,). and normal current account loans, investment loans, working capital loans, etc.

How does the mortgage process look like?

1. The process begins with a needs assessment, based on that I get to know the client’s exact needs. To do this, I usually ask you to fill out an online assessment form, in which I ask for all relevant information that may be important for the later calculation.

2. Based on the information provided, I select the possible banks (there is a good chance that some banks will be immediately eliminated based on the needs assessment for some reason). In many cases, it is possible (and worthwhile) to request a unique offer for my clients, so I get the banks to compete that are willing to provide a unique interest rate in the case of a promising loan deal.

3. I send the three best bank offers to the Customer, highlighting the advantages and disadvantages of each, but it is very important that the customer chooses in each case, I only collect the information necessary for the decision and negotiate the best conditions.

4. After choosing a bank, I will compile and fill out the necessary application and mortgage/loan package, and I send the Customer a checklist of what papers and certificates he needs to obtain (employer’s certificate, OEP certificate, bank account statements, etc.)

5. We go through and discuss the application/mortgage package with the Customer at an agreed time, and if there are no questions left, we sign it. After that, I take the whole package to the branch of my choice, where I work with well-selected, professional administrators, so in many cases I can speed up the process, or if for some reason this is not possible, then at least there is a continuous flow of information between the bank and me, so I can keep my clients up to date.

6. The bank orders the appraisal, the appraiser goes to the location, assesses the property, and the official appraisal is prepared within about 1 week from the submission of the request.

7. Based on the appraisal and the submitted documents, the bank decides whether to grant a loan.

8. In case of a positive decision, the draft loan and pledge agreements will be sent to the Customer by e-mail, which can be signed after a mandatory waiting period of 3 days at the earliest. Anyway, this is the first point in the process when the Customer meets the bank clerk. The notarial commitment statement as well as the home insurance is also signed currently.

9. Once the disbursement conditions are met, the Bank will disburse the loan amount to the appropriate account number.

The entire process generally takes 4-6 weeks, but in the case of a “lucky star constellation”, it can be completed in as little as 2 weeks. In case of any complication, it might take longer though.

What happens in the case of unsecured loans (baby loans and personal loans)?

The process is the same as the mortgage lending process, with the difference that in this case obviously different application data sheets must be used, and it may also be necessary to obtain additional documents from the Applicant. Of course, there is no need for an appraisal, and the loan amount is also lower (it can be a maximum of HUF 12,000,000, but typically, personal loans are between HUF 2-5,000,000). Thanks to this, the decision is also faster, it can even be shortened to a few days (in extreme cases, within-day disbursement is also possible). Here the process can also take up to 2 weeks in the event of a deficiency, complication, or higher loan amount.

Corporate loan (loans for small and medium-sized enterprises-SME lending system)

Corporate loans are an interesting topic, as it is difficult to establish exact rules and criteria, according to which, if certain conditions are met by the applicant company, it can be assured that it will receive a loan.
In general, a good pre-screening / pre-qualification can be made for the Applicant by submitting the following documents:

• Annual reports of the previous two years
• Statement of the ledger of the previous (closed) year
• Current annual ledger extract.

Bank selection can also be made based on the pre-qualifications, but it may even happen that the applicant consults with the SME lending specialists of 2-3 banks before making the decision. After choosing a bank, I send the necessary documents and a customer handover data sheet to the chosen bank, and from that point the bank takes over the whole administration, arranges a personal meeting with the customer, and in the case of a successful product selection, they can conclude the specific loan agreement in one step.

Which type of loan would you like to read more about?