Debt impacts mental health and spending habits in Poland

A report titled ‘Polacy i kredyt: między finansową odpowiedzialnością a codziennymi potrzebami i pragnieniami’, prepared by Professor Katarzyna Sekścińska from the University of Warsaw in cooperation with the Polish Bank Association, highlights the significant impact of debt on Polish citizens. Approximately 48 percent of Polish borrowers have experienced difficulties with repayments. This financial strain affects mental health, with nearly one-third of debtors reporting a decline in well-being, and physical health, affecting 17 percent of cash credit borrowers and 20 percent of mortgage holders.

To manage debt, many prioritize loan installments over daily living expenses, leading to reduced spending on vacations, social gatherings, and hobbies. Notably, some borrowers reduce spending on food and medication to meet obligations.

On the management side, experts suggest that mortgage terms do not have to remain static for the entire duration of a loan. As market conditions, interest rates, and individual financial situations change, borrowers may benefit from refinancing—transferring a loan to a different bank to secure lower margins or better interest rates—or utilizing consolidation loans to optimize their monthly financial burden.