The National Bank of Serbia expects that banks will use the opportunities to offer loans to citizens up to 800 euros only with a statement of employment and earnings given under criminal and material liability.
Although this type of loan is approved today by only one bank in Serbia, and that is domestic, the practice could very easily and quickly change. Yes, it is not a question of banks’ obligations, but an opportunity given to them by the central bank, but the fact is that there are new moments today.
“A number of banks addressed the NBS regarding certain aspects of the application of this measure, because an efficient procedure, with reasonable risk, also affects the banks themselves, so we expect the banks to use the given opportunities,” the NBS states. They add that the proposal for such loans came from the banks themselves.
For repayment 2 years
Loans through citizens’ statements, which is why they are also called word loans, which citizens could repay in a maximum of 24 months as an opportunity for banks to offer them, have existed since the end of August.
Economists take them for riskier products, which is why, as they estimate, we should expect heavier approval and higher interest than the regular one.
In case the banks still decide on such loans, they will decide on the interest individually. Currently, cash loans in banks can be taken at an average interest rate of 10 to 12 percent, and that would mean an average monthly installment of around 35 euros in the case of a loan of 800 euros for two years.
The decision of the NBS states that products of this type can be approved only until the end of 2021.
Interest is never lower
Cash loans could be taken in 2010 with an average interest rate of 26 percent, five years later the interest rate dropped to 18 percent, and in January 2017 it reached 11 percent, according to official data from the National Bank of Serbia. Today, dinar cash loans can be found at an interest rate of 8-9 percent, which practically means that the interest rates have been halved within five years.
At the same time, the average interest rate on housing loans indexed in euros was 6.6 percent in 2010, while today the most favorable interest rate is around 2.5 percent. So, these loans are more than twice as cheap today. It should be borne in mind that the loan installments are lower due to the fall in the European interest rate Euribor, to which most foreign currency loans are tied.
What does it look like in practice? If in 2010 you wanted to take a cash loan of 4.5 thousand euros with a repayment period of 5 years, the monthly installment would be around 130 euros. If you take the same loan today, you will repay the bank a little more than 85 euros a month, Kamatica reports.
