[ad_1]
In recent years, bankers have lowered interest rates, making it easier for citizens of Serbia to decide whether to accept cash and housing loans, as average interest rates have practically been cut in half. Competition in the market, but also the easing of the central bank’s monetary policy, were the ones that most contributed to the reduction of interest rates, that is, “cheaper money”.
However, the conditions for the approval of loans have remained quite strict, especially since the corona virus intervened in the entire calculation, which brought additional risk for both parties, both for banks and their clients.
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 to 9 percent, which practically means that interest rates have been cut in half in five years.
At the same time, the average interest rate on euro-indexed mortgage loans was 6.6 percent in 2010, while today the most favorable interest rate is around 2.5 percent. Therefore, these loans are more than twice as cheap today. It should also be taken into account that the loan installments are lower due to the fall in the European Euribor interest rate, to which most foreign currency loans are tied.
How does it look in practice? If in 2010 you wanted to take a cash loan of 500,000 dinars, with a repayment term of 5 years, the monthly payment would be around 15,000 dinars. If you take the same loan today, you will pay the bank a little over 10,000 dinars a month.
When it comes to housing loans, anyone who bought an apartment 10 years ago could count on a loan of 70,000 euros, with a term of 20 years, to pay off a little more than 500 euros per month. Today, that same loan would cost you about 370 euros per month.
Stable inflation and positive economic trends
The National Bank of Serbia has repeatedly explained that the obvious reduction in interest rates is the result of the easing of the central bank’s monetary policy by lowering the benchmark interest rate, which is possible thanks to interest rates. low and stable inflation from the previous period, as well as positive macroeconomic trends. This was also reflected in reductions in money market rates, such as the six-month belibor.
According to the NBS, the strengthening of competition between banks, with a positive impact on the reduction of interest margins, mainly affected the relaxation of the banks’ credit conditions.
As economists point out, cash loans are most often used to help citizens overcome financial difficulties or repay accumulated debts. You are less likely to buy something specific, because that is what consumer loans are used for.
On the other hand, it is much more difficult for bankers to find a customer for a home loan than it is for a cash loan, so they focused on cash loans. After a period of several years, during which home loans were heavily advertised, today bank announcements focus more on cash loans.
[ad_2]
