How do you get rid of non-bank loans? In recent years, more and more people have turned to non-bank companies for a loan. The loan is faster, easier to get and looks very attractive at first glance. But nothing is quite as rosy as it first appears. Some non-bank providers use tricks to squeeze even more money out of clients. Some operate right on the edge of the law. In this article we will show you how to get rid of non-bank loans and outline the tricks that non-bank institutions use.
Non-Bank Companies
Before the amendment to the Consumer Credit Act, 8 out of 10 non-bank institutions were fraudulent. Thanks to the amendment to the Consumer Credit Act, the market has been cleaned up, and we can now say that the quality providers that remain are supervised by the Czech National Bank (ČNB). Even so, banks are still more reliable loan providers. That is why we will be careful when choosing a non-bank company. Let’s look at a few tricks that can “legally” take our money.
Overpriced Customer Service
Expensive customer service is a favourite trick of non-bank companies. They lure potential clients in with a phone call about setting up a loan. To sort out the details, we have to call another phone number. That one is charged, though, and a minute of the call can cost as much as 100 CZK (about 4.6 USD). The operator on the other end of the line will, of course, drag the call out as long as possible. A single call can easily stretch to ten or fifteen minutes, which can cost us 1,000 CZK (about 46 USD) to 1,500 CZK (about 69 USD). For many people, this can be a bitter experience. We have to pay for the call even if the loan is not approved.
Terms in the Small Print
We always have to read all the documents carefully. This applies to non-bank providers, but also to bank providers. Once we sign these documents, there is no going back. Addenda and terms are often written in small, almost illegible print, which can be a problem especially for older people. Every company also has a different contract length. Some issue two pages, others make us sign as many as 40 pages. We should always read every contract thoroughly, no matter how long it is.
Small Loans
So-called payday loans are also popular. These do not exceed 5,000 CZK (about 230 USD) and are not subject to consumer credit law, but to the Civil Code, which is very lenient in many respects. So this is purely a loophole in the law. This means even people on the debtor register, who cannot prove their income and are registered with the labour office, can get money. These loans are set for a few weeks, after which the client has to repay all the money, including fees and high interest. If the client wants a larger amount, the provider splits the loan into several parts of up to 5,000 CZK (about 230 USD) each. The loan is very disadvantageous and can cause clients considerable trouble.
Free Loan
Another dangerous trick providers use to lure in new clients. They offer the first loan free for new clients. Sounds very tempting, doesn’t it? No fees, no interest. If we repay the money by the deadline, we pay nothing extra at all, just the amount we borrowed. The danger is that this is usually a loan with a repayment term of up to 30 days. Few people manage to repay the money in such a short time. Just one day’s delay and the benefit is gone. Then come the fees and interest we have to pay, just like with a regular loan. If we are even later, we face high penalties and late payment interest.
APRC
We found a great offer with an interest rate from 4% p.a. Sounds very good, but only until we find out the value of the APRC. The annual percentage rate of charge (roční procentní sazba nákladů, RPSN), which includes administrative fees, the application assessment fee, loan management and so on, can be more than 10% p.a. That is not so good any more. Unlike the interest rate, which will be flashing prominently on the front screen, the APRC will be in small print somewhere in the corner.
How Do You Get Rid of Non-Bank Loans?
While repaying the loan, many of us discover that it is not as good a deal as it seemed at first. Fortunately, in that case we have a few options. If we only have one loan, we can refinance it. This means transferring the loan to another financial institution under new terms. It is one way to get rid of a non-bank loan. It means repaying the loan early with another (better) loan from a different bank. So we can refinance our non-bank loan with a bank loan. The bank’s terms will be better and much more solid.
Another way to get rid of non-bank loans is consolidation. If we are repaying several loans (often from different providers), we can merge them into a single loan with one financial institution. This makes our finances clearer, saves on bank fees, lowers high monthly repayments, and means we pay only one instalment each month. We can consolidate bank and non-bank loans, overdrafts, credit cards, micro-loans and leasing too. What matters is not how many loans we want to consolidate, but their total amount. Banks most often consolidate loans of up to 800,000 CZK (about 37,000 USD), though some will merge loans into a single one worth up to 2.5 million CZK (about 110,000 USD). Loans where the debtor is behind on repayments cannot be included in consolidation.
They say the best debt is no debt at all. If circumstances force us to take out a loan, we will always pay maximum attention to making sure the loan is as favourable as possible.
Also read the article how to get out of debt.
USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK per USD on 2 October 2026.
