What is the top limit of interests for consumer credits?

Interests for consumer credits are likely to climb to 36% per year for loans contracted in national currency and 20% per year for loans contracted in euros, credit brokers say, as the interbank loans are more restrictive.

“For loans contracted from commercial banks, interests have increased by 1-2% in average,” said Anca Bidian, managing director of Kiwi Finance.

Personal loans in euros contracted from commercial banks range between 12.8% and 20% per year, while for unsecured loans in lei, clients will pay an interest that varies between 17% and 36% per year, according to Bidian. For mortgage loans in euros, banks charge interests between 8.9% and 14% per year and for that in national currency, the interests vary between 10.7% and 24%, according to the data provided by Kiwi Finance.

Compared to deposits’ yields, the interests paid by the banks are slightly over 13% yearly and 6% for euros, after repeated increases operated in the last months.

“It is natural for a bank not to increase interests for deposits at the same pace as for credits, they have to manage appropriately profit and costs”, said financial consultant, Bogdan Baltazar. Furthermore, he outlined that drawing liquidities on the internal market is limited by low capacity of Romanians to save money.

Non-banking financial institutions have raised interests for new credits, Anca Bidian added. “There were indeed interest raises even before this agitated period, but the non-banking financial institutions we are working with have briefed on raises mostly for the new credits”.

Therefore, for personal loans in lei contracted through Kiwi Finance from non-banking financial institutions, the clients will have to pay and interest of at least 20% per year, Bidian said. “Before, the interests were around 15% per year”.

Volksbank Romania lifted interests for old loans in Swiss francs and for new loans in euros, but it did not change the interests for loans in lei, as the bank bets on a cut of the benchmark lending rate in the following BNR session scheduled for October 30.

“We raised interests for old loans in Swiss francs by 1% as the costs of refunding in Swiss francs soared and we are setting minimum reserves in euros. We are still well-positioned, because we have the ten-years refunding loan, as the Swiss banks are no longer granting interbank loans and keep their liquidities,” Gerald Schreiner, Volksbank chairman stated.

Volksbank has recently made publicly, together with other banks in Romania that it will halt lending in Swiss francs. Schreiner said the decision was made as a response to Austrian lawmakers’ recommendations, and also due to new regulations enforced by NBR, that limited too much the indebtedness level for loans in Swiss national currency.

“The top indebtedness level in Swiss francs climbed to 36% pressured by the new lending conditions. There was no point to keep the products in the offer,” chairman of Volksbank Romania added.

The bank added 0.75% to interest charged for new loans in euros, and Schreiner did not excluded the possibility of further similar measures, yet the bank will not raise any interest for new loans in euros by late October.

Translated by Camelia Oancea

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