Credit market situation

Nowadays, loans are much more expensive than in the same period last year or last year

The fact is that the financial crisis is also felt in Croatia in all segments of society. Government, banks, entrepren$s and ordinary citizens are burdened with various problems concerning their business, jobs, property, health.

Caused by the crisis, foreign banks – owners of Croatian foreign-owned banks, do not invest the amount of money as in previous years, because they place money in their home countries.

Also, because of the situation in Croatia, banks lend money to the Croatian economy and thus do not have enough credit for retail loans. Due to the above, today loans are much more expensive than in the same period last or the previous year, and banks are strict and picky when assessing their creditworthiness.


Banks choose the ideal clients

bank loans

In order to protect themselves from potential risks, more and more information about future debtors is being sought in their loan forms, and debtors have returned to the big door, which, with the usual life insurance, has again become a frequent instrument of securing a loan.

As most banks are part of the HROK system, a mandatory “Credit Report” detailing all of the customers’ debts, guarantees and co-habits places an insurmountable barrier on those who have a messy credit history in any way.

Currently, in Croatia, the maximum amounts of non-purpose loans are $ 25,000, for a term of 10 years with interest rates ranging between 10.5 and 12.5%.


Shop on stocks

credit market

The situation is no better with home loans, where banks give 25-35% less loan amounts than the appraised value of real estate. 1: 1 loans are waiting for some better times. If you do not buy on stock, where banks cooperate with their investors, interest rates range from 7 to 9%. The fall in property prices is a good opportunity for buyers with cash, while everyone else will have trouble realizing the loan. It is important to note that almost all banks, whether they are non-purpose loans or housing loans, discourage loans to non-clients or those who will not, by not granting loans to them, or by granting them on drastically worse terms.

If the announcements of banks and the CNB are to be believed, banks are expecting another blow to the crisis caused by non-payment of loans. The growth of bad loans in the coming period will be a threat to the profitability and stability of banks’ operations. The CNB annual report states that the banking sector has coped with the consequences of the global financial crisis so far. At the beginning of this year, there was a slight increase in bad placements, and in the coming period, the recession of the domestic economy will have a stronger impact on the quality of banks’ assets. Experts point out that the full impact of the recession on the quality of banks’ assets is likely to be seen next year.

Reputable debt consolidation loan companies -Does debt consolidation help?

Do you need money? In that case, you can take a loan. There is nothing wrong with lending money. Trouble starts when we borrow more and more – also to pay off our current obligations.

We define the excessive debt burden with credit and loan liabilities. We deal with it when the client incurs more and more new loans and credits, some of which is intended for the repayment of currently held debts. It is very dangerous – you can then fall into the trap of permanent debt. How to avoid this?

Does debt consolidation help?

Pożyczka na pożyczkę, czyli spirala zadłużenia

A debt spiral can affect anyone – even a person who has a good credit history and has never had problems with settling his obligations before. Such a problem may arise when the client is unable to control his own expenses and buys more and more.

Also, the problem may arise when the borrower falls into financial trouble, for example losing his job, and there will be large and unexpected expenses, for example related to illness, disaster or personal problems.

A person who has a loan starts taking out the new bank and non-bank loans. They are spent for various purposes, and part of the funds raised is also used to repay the installments of current debt. As a result, debts start to pile up, creditors get impatient because they do not receive money. There may even be debt collection or seizure bailiff proceedings if the case goes before the court.

Spiral debt – how to protect yourself from it?

Spiral debt - how to protect yourself from it?

The main principle that we should keep in mind is lending money only when we really need it. It is better to start putting off regularly than taking a loan. If we have problems with saving, we can try to reduce some costs so that we have more money in our pocket. When we already have a loan or loans, let’s be careful not to incur further ones on impulse.

Banks and loan companies have their own protection mechanisms against clients’ debt spiral. Currently, borrowing money is not a problem, because we can do it even online, but we have to meet certain requirements. Banks, as well as non-bank loan companies, check their clients – they control BIK and BIG databases, and in case of any doubts they ask for the transfer of documents confirming their income. Therefore, we can be refused if we are not a trustworthy customer according to the lender.

How to get out of the spiral of debt?

How to get out of the spiral of debt?

Getting out of the debt spiral can be a serious problem. We should remember that it is necessary to carefully plan the debt repayment – with the appropriate plan we will be able to determine which debts should be repaid first. It will also be necessary to develop an appropriate household budget – reducing costs, acquiring new incomes.

Debt consolidation loans can also be taken into account- you could check here.

Rental clause: how do lenders deal with it?

In virtually all mortgage agreements that were concluded in the past, the lender prohibited the homeowner from renting the house entirely or partially without the prior consent of this lender.

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The old-fashioned rental clause

The idea behind this stipulation is that the lender wants to be able to sell the house empty in case the consumer does not meet his payment obligations. Tenants have a high legal protection in the Netherlands. For a bank it is then difficult to sell the property without the tenants. A property that is partly rented out provides too little to repay the mortgage debt entirely or for the most part.

Times change

As we have already seen in this newsletter, there are several changes that also affect the rental clause. For example, there are lenders who just give a mortgage to consumers who will buy a home with it and subsequently rent it out. Then such a rental clause is of course nonsense. There has also been legal protection from consumers with a mortgage since 2016, which means that a lender must make a strong effort to prevent the need for forced sale.

Family to 2nd degree

Recently, a lender introduced a new mortgage that allows the consumer to partially rent the home in which he lives to relatives up to the second degree. Such a situation is expected to occur more and more frequently in the coming years. For example, in the case of elderly people with a large home whose children can not have their own living space after a divorce or grandchildren who have to wait for a social housing or save for a number of years in order to buy their own home. In the context of informal care, it will also become increasingly common for a family member to live in it.

Subletting has the necessary consequences

Irrespective of whether the mortgage lender does or does not give permission for the leasing of (a part of) the building where a mortgage is based, such a rental sometimes has far-reaching fiscal, legal and financial consequences for both the owner of the property and the tenant.

First discuss with us

Do you have a house on which a mortgage rests? Or do you want a mortgage that gives you the right to rent out the house in part in the future? Then come and talk to us before you conclude a rental agreement with someone. We can then discuss with you the arguments that motivate the lender to agree with (temporary) letting. Or to choose a lender who in advance agrees with this rental.

Mini loan or Personal loan

Which you should pay attention to.


It can happen in every household or personal situation that the month is longer than the wages reach, or that incidental expenses have to be made where the funds simply lack.

In such a case it is always possible to ask friends or family for money, but experience tells us that this often causes problems rather than solutions and, above all, in the long term repentance. A more obvious solution is therefore perhaps to borrow money.

Borrow money, such as a personal loan?

There has been a taboo for a long time, taking out a loan to pay for extra expenses. It would be too expensive and not all necessary at all, and it would also be far too easy to borrow money.

Nowadays, this taboo is completely lifted and even most people realize that a loan in these times of economic difficulties can be a good solution. Not only to pay for expenses, such as a new car or washing machine, but also to have the opportunity to dive into that one hole in the market before someone else does it.

A personal loan or a mini credit?

The most loans granted in the Netherlands are the mini loan and the personal loan. Both loans are very similar and it is the small differences that make the distinction. So is the
minilening often a loan where a small amount can be borrowed very quickly (up to a thousand euros) which generally also has to be paid back within a short period.

However, a mini loan is possible again with a negative registration at the BKR in Tiel, an advantage compared to the personal loan. With the personal loan, however, you can borrow much higher amounts and both the interest and the term are discussed and recorded in advance. What do you have to pay attention to before you take out one of these loans?

First of all, it is wise to compare the various providers. What about the maturities and interest rates, where are the large differences in the conditions and how flexible can the provider respond to changes in your personal situation?

In addition, it is always wise to calculate how much you can spend in the month on the interest and the repayment, so that you never borrow more than you can pay back. Because getting off the shore in the ditch is of course no one happy about it.

Take out a loan online

If you have decided which type of loan you need and what your wishes are about, for example, the term, you can easily take out a loan online . 

Get a loan

To take out a loan online you follow a number of important steps. Comparing all loans and providers is the most important step.

There are various websites on which you can compare different providers of various loans. Comparing is important to achieve the best and cheapest loan . Not every loan is equally suitable for your situation. Important factors are the interest rate, the term and the monthly repayment.

Compare loans

 When you are on a website where you can compare or apply for loans, you start by entering a number of personal details about your situation. This is meant to see if you are eligible for a loan and what amount you can borrow as much as possible.

The information you need includes the desired loan amount, the purpose of the amount, your personal details and your financial situation (income and monthly payments) and preferences. A possible BKR listing may also affect the loan amount and the interest offered.

In addition, you have the option of giving extra income to your partner. On the basis of your entered data, the lender determines whether you are eligible for the loan and for the desired loan amount. Every quotation is almost always without obligation, so you are not stuck with anything.

Request quote

You can request a quote after applying for a loan. It describes the interest rate, term, monthly repayment and conditions. This information must be present in the quotation. In addition, they differ slightly per provider and per type of loan.

By requesting multiple offers you can compare the conditions of different loans. This allows you to determine which loan is cheap and sensible for your situation under what conditions.

It is important to carefully read and compare the conditions. For example, you can see how much closing costs you pay for the loan and whether extra (early) redemption is possible without penalty. Of course you can always call in help from advisors.

When you have opted for a particular loan, you sign the contract and send it to the relevant lender. Sometimes you still have to send papers, such as identification or proof of income. The lender then also signs the agreement and sends you a copy. Without signature, the agreement is obviously not valid.

The pros and cons of a mini-loan

A mini loan is a loan with a short term. Often it is between 7 and a maximum of 28 days. 

The amount to be borrowed is usually between € 50 and € 750 at a time. Such a mini loan is usually easy to close, sometimes the money is even after 10 minutes on your bank account. This is of course very useful when you need some extra money quickly.

In this article, I want to give more thought to the pros and cons of a mini-loan. As is also apparent from the above paragraph, a miniature loan is of course very easy and convenient at first glance. This can be closed quickly and they are small amounts, so that almost everyone can take out such a small loan.

Benefits of closing Mini Loan;

  1. Quickly borrow a few hundred euros, for example as an advance on income;
  2. Requesting a mini loan is quickly arranged and is often paid the same day;
  3. The costs of a mini loan are known in advance, you know where you stand;
  4. The mini loan can be requested quickly via the internet or SMS

In addition to these advantages, there are also some drawbacks to a mini-loan that certainly needs to be stopped;

  1. Generally high costs in relation to what you lend;
  2. Repaying the loan too late is very expensive;
  3. Pay attention to extra service costs.
  4. This differs completely per provider, for more details see the closing page

So a mini-loan has its advantages, but certainly also its disadvantages. On the one hand there is the ease and speed with which a mini-loan can be requested. Also the amount is often quickly on your account. On the other hand, these loans are expensive in relation to what you borrow. If you want to take out a mini loan, that is of course your right.

It can certainly be a godsend to quickly borrow some extra money for the holidays or when something important in the household breaks down which needs to be replaced quickly. However, I would like to emphasize that you are well aware in advance that these mini-loans also cost money.

What is perhaps even more important, make sure that when you take out a mini-loan, you can always pay it back within the set time limit!

Is it possible to take out a second mortgage?

Closing the second mortgage.

Taking out a first mortgage is one thing, a second is closing another, via a second mortgage an extra loan is actually taken on the same collateral. Did you borrow as much as possible with the first mortgage? Then you will have to prove for the new mortgage that the house has increased in value. In other words: that there is now an overvalue on the house.

Closing a mortgage is actually very simple. Indicate to a lender that you want a second mortgage, and they will see if you are eligible. On average, a mortgage is always taken out with the same lender as the first mortgage.

This follows from the protection rules of mortgage creditors. In the event of any defaults, the first mortgage lender has priority over any subsequent mortgage creditors. This means that the mortgage lender would fish behind the net, and in the worst case would see nothing more of his money.

Such a “higher risk” is then usually translated into a higher mortgage rate. As a result, the interest rate is lower than the interest rate on a personal loan , but still higher than that of a first mortgage.

Renovate your home?

Planning to renovate a house? Then an extra mortgage is an excellent opportunity. Because the interest on the second mortgage can be tax deductible for renovations, remodeling is often a lot cheaper.

Sour-earned savings can also remain unrelated to the savings account. The credit mortgage is a frequently used form of credit for renovations. The borrower can freely withdraw the amount up to his limit and repay the credit at his own pace.

Crossing the existing mortgage is an alternative to taking out a new mortgage. The disadvantage, of course, is that you will have to pay a penalty amount, compensation for termination. Comparing the termination compensation and searching for the best mortgage lender is therefore recommended.

Are there no snakes in the grass?

A mortgage, of course, also entails some costs:

  1. Closing costs for a new mortgage
  2. Notary fees for any purchase of a second home
  3. Costs for valuation. In order to show that the house on which the first mortgage runs has increased in value, the home will have to be valued. Such a valuation is of course not free of charge.

Mortgage for a second home:

A holiday home from thousands found? Before you make an offer on the house with your savings, it is good to know that a second mortgage is also possible. A disadvantage, however, is that the interest on the mortgage of the second house is not tax deductible.

There are also many lenders who want to take out a second home financing. Also browse through the range of credit providers in the holiday countries themselves. They often have attractive rates for second homes, and they can estimate the risks better than Dutch or Belgian banks.

The fact that certain countries, such as Spain, work with variable mortgage rates is all the best. Comparing mortgage rates for a second mortgage is a must.