Poland Faces Rising Debt Arrears Despite Low Household Debt Ratio

While Poland's household debt-to-GDP ratio remains considerably lower than in Western Europe, a concerning trend of increasing payment arrears is emerging. The ratio stands at just over 20 percent, a fraction of the 60-90 percent seen in many Western European nations. Furthermore, the number of adult Poles holding loans has been declining since 2019, with nearly a million fewer borrowers now compared to its peak.

Despite these figures, the proportion of individuals struggling with overdue payments is not significantly different from Western Europe. At the end of 2025, almost 2.4 million Poles had overdue liabilities totaling over 81 billion PLN. Each month, approximately 20,000 individuals fall into their first delinquency exceeding 90 days, with a mere 1.4 percent chance of returning to on-time payments the following month.

The risk of a debt spiral in Poland should not be underestimated. This phenomenon is driven less by the overall debt amount and more by the burden of repayment, especially concerning short-term, high-interest obligations. Poland has one of the highest ratios of consumer credit to GDP in the European Union, nearly 7 percent.

The situation varies across financial market segments. Over 90 percent of customers exclusively using banks have no delays, while less than 6 percent have arrears exceeding 90 days. However, among customers using both banks and loan companies, 47 percent have no delays, but 29 percent have overdue payments exceeding 90 days. For those exclusively using the loan sector, 48 percent are current, but a significant 37 percent have arrears over 90 days. Short-term cash loans (up to 60 days) present the most repayment challenges, with over a quarter of clients having arrears exceeding 90 days or their debt in collection or enforcement. This trend has been steadily increasing since 2023.