Credit market situation – second half of 2019

The general public, and sometimes even the professional ones, is confused by the number of changes that have occurred in the macroeconomic field, which has led to Croatia’s accession to the European Union. The complex macroeconomic environment and the recession have a negative impact on all segments of Croatian society.

To overcome the difficulties caused by the economic and economic situation, the need for citizens and businessmen for credit has never been greater. However, the financial crisis and difficulties in repaying the already existing debt of citizens are affecting banks’ actions in granting loans.

Non-purpose loans, more expensive or cheaper?

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In 2013, the effects of the recession and the inability of citizens to fulfill their obligations under existing loans are increasingly being highlighted. Banks have responded to this problem with so-called refinancing loans. With this type of loan, debtors are able to close all their debt with a larger amount and for a longer repayment period, thus reducing the installment and facilitating their own existence.

This has led to an increase in the maximum amount of non-purpose loan from USD 25,000 to USD 35,000 in individual banks. Also, the loan repayment period has been increased from 10 to 15 years . In order to avoid problems with repayment of loans in new placements, banks have significantly tightened the eligibility requirements.

If the client is blacklisted or has a mess in the credit report on existing debits, the possibility of obtaining a loan without a co-debtor or securing repayment of the loan, the so-called There is almost no CPI (Credit Payment Insurance).

The third form of credit that banks are increasingly resorting to, which is not yet well-known to citizens, is non-purpose cash loan with fiduciary or transfer of ownership for insurance purposes. Interest rates on non-purpose loans range between 7.80% and 9.50% for variable rates, or about 10.50% for fixed interest rates. Most commercial bank catalogs have recently seen loans in E-Money .

Housing loans, more expensive or cheaper?

Housing loans, more expensive or cheaper?

With the onset of the economic and economic crisis, banks have offered clients several options to overcome the difficulty of repaying home loans without paying a fee to change the contractual terms of the loan. Measures to facilitate repayment are mainly to enable clients to reduce their current monthly commitment.

One of the most common measures is to extend the loan repayment period to a maximum of 35 years for EUR loans and up to 40 years for CHF loans. In order to more easily overcome the current crisis and reduce the installment, clients are offered to repay only a portion of the loan principal, the so-called repayment with residual value .

Clients who have lost their jobs

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Used maternity leave, long-term sick leave or have a significant reduction in income may require a moratorium , or a repayment delay. For loans related to CHF, clients have the right to request a deferred claim from the bank (introduced in 2011 pursuant to a Memorandum with the Government of the Republic of Croatia). In addition to a broad range of refinancing loans for existing home loans, banks have also placed new home loans on the market, the most favorable of which are energy-efficient home loans . Interest rates have not changed much in the last year, ranging between 4.50% and 7.50%, depending on the energy certificate of the property and the client’s age group.

What has changed in the market in the last few months is the emergence of E-Money home loans and the return of the real estate value to loan ratio of 1: 1, in most commercial banks. An obstacle to buying a property in this recessionary era when property prices have fallen significantly, apart from a lack of creditworthiness, may be the lack of a usable permit or energy certificate of the property.