Romanians pay loan installments with annual effective interest rates almost double compared to many European countries.
According to Eurostat data, the average annual effective interest rate on mortgage loans in Romania is 6.5%, well above the euro area average of 3.8%.
Significant differences are also present in consumer loans. In Romania, the interest rate reaches 10.2%, compared to the European average ranging between 5% and 6.5%, according to Economica.net.
While countries like Germany and France have more favorable interest rates, around 5.5% and 6%, Hungary and Poland have similar interest rates to Romania, at 9.8% and 9.5% respectively.
Several key elements underlie this difference:
- Inflation rate: Romania had one of the highest inflation rates in Europe, compared to the European average in 2023. Banks adjust interest rates to compensate for economic risks.
- Perception of risk: The Romanian economy is considered riskier compared to the eurozone countries, leading to the application of higher interest margins.
- Financing costs: Banks in Romania have access to funding at higher costs compared to those in developed Europe, which is reflected in the interest rates offered to customers.
"Accurate information and cost optimization are essential when Romanians make credit plans. Although interest rates are higher, there are solutions to reduce these costs through careful comparisons and brokerage services. Refinancing or direct negotiations with the bank can make a considerable difference in the long term," says Valentin Anghel, CEO of AVBS Credit Broker.