The Bank of Israel recently published data on delays in household loan repayments in Israel. The data shows that borrowers with more than 90 days of delinquency, saw an increase of over 40% compared to last year. The late payments are worth 3.2 billion shekels (888 million dollars).
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The data also shows a significant increase in general-purpose loans, totaling some 570 million shekels ($160 million). This represents a 26% increase year over year .
The Bank of Israel also lifted the ceiling for the amount of credit you can get through collateral mortgages, from 50% of its value to 70% of the home's value. More than a quarter of bank accounts in Israel were overdrawn all year, the data shows.
These and other data highlight the need for households to manage the family budget on an ongoing basis and with the involvement of all family members. This also means that households should look at their credit to see if it is managed optimally and make changes if necessary.
Here are some ways to properly manage a household credit portfolio:
- Try to pay bills in full and on time – delinquent payments hurt your credit rating.
- Avoid taking new loans or credit cards unnecessarily.
- Try to negotiate good interest rates from the financial institutions you work with - long-time customers may be treated preferentially.
- Consider consolidating small debts into one loan under a debt arrangement, this can ease repayment.
- Closely monitor your statements and accounts to identify anomalies or unreasonable charges.
- Consider getting credit from sources you haven't accessed before, while closely examining the repayment terms.
- Plan for the long term – wise savings and investments can reduce the need for credit in the future.
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