There are few moments when you can say that it is worth taking a loan, and at the moment this is exactly the situation, especially when it comes to short-term loans. Namely, inflation is close to nine percent, with a tendency for the next month or two to reach double-digit levels.
At the same time, interest rates on loans are still low, often lower than inflation, which means that they are realistically negative. This is especially true for dinar loans to businesses whose interest rates are four to five percent lower than the inflation rate, according to the analysis of the specialized macroeconomic bulletin Quarterly Monitor.
When it comes to the population, Milojko Arsić, editor of the Quarterly Monitor and professor at the Faculty of Economics, points out that it is currently worth taking a short-term loan.
“In the current situation, it pays to take a loan, but in the short term, because less money will be returned in real terms than it gets.” It is different for long-term loans, because there will be a change in interest rates “, estimates Arsić, reports Danas.
Interest rates on housing loans remain at record lows. According to the statistics of the National Bank of Serbia, in January, the average interest rate on approved housing loans was only 2.8 percent. This refers to loans indexed in euros, while interest rates on housing loans in dinars are around six percent, but the volume of approved loans is at the level of statistical error, only 0.2 percent of total housing loans.
These loans are mostly with a variable interest rate, which means that the interest rate consists of the bank’s margin and Euribor, which is currently negative, which in fact makes these loans cheap.
The risk with these loans is twofold. First, when the European Central Bank raises the interest rate, which is expected by the end of the year, it will be followed by the interbank reference interest rate Euribor.
Another risk is the change in the exchange rate. With the growth of the euro exchange rate, the installment of loans in dinars would increase, while on the other hand, the incomes of citizens are mostly in dinars.
Whoever buys an apartment now should consider a housing loan with a fixed interest rate, and several banks have such an offer and advertise interest rates lower than four percent. This type of loan is free from the risk of interest rate changes.
For several years now, banks have been granted a larger amount of cash loans than housing loans. The total amount of approved cash loans reached 4.8 billion euros in January.
Unlike housing loans, the cash loan is in dinars, and it is difficult to find a loan in euros in the offers of most banks, although interest rates are much lower.
According to the NBS, the average interest rate for a loan in dinars was nine percent, while the interest rate for a loan indexed in euros was 3.5 percent.
Although the average interest rate is nine percent, banks’ offers often include interest rates of 15 and even 18 percent. What is also striking is that with fixed rate loans, interest rates are higher than those with variable rates.
In any case, according to experts, it is a matter of time before the banks will start raising the interest rate. Veroljub Dugalić, professor at the Faculty of Economics in Kragujevac, estimates that commercial banks are waiting for the reaction of the National Bank of Serbia.
“The NBS keeps the reference interest rate at one percent, even though inflation is above eight percent. That is unsustainable. I think the NBS will react quickly, within two or three weeks. No bank wants to run out because it could lose customers. “Besides, we don’t know what the reaction of the National Bank could be,” Dugalic said.
He adds that if a loan with a fixed interest rate and a low one can be found, it is very favorable, since interest rates are still at record low levels.
“The time of low interest rates is passing. Interest rates are waiting for us, although I do not believe that they will reach the levels we once had,” he said.
The banks we contacted with the question of whether they expect interest rates to rise did not want to answer questions, Nova writes.
