The interest rate on the loans will change?

Only persons dealing with civil law know that from the beginning of 2016 new regulations regarding statutory interest, statutory interest for delay, maximum interest and maximum interest for approx. We are talking about interest which is calculated as remuneration for the use of someone else’s money or Check penalty points online.

Penalty for late payment of obligations

Penalty for late payment of obligations

Despite the introduction of new regulations on at the beginning of January 2016, the maximum interest rate on liabilities did not increase and still amounts to 10.00% per annum.

Changes in loan conditions are more visible when the VVBC reference rate is adjusted for the first time (currently: 1 , 50%.) Therefore, it is worth carefully presenting the new rules for calculating statutory and maximum interest.

For now, the January changes in regulations are beneficial for debtors

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At the beginning it is worth mentioning that the principles set out in the Civil Code apply only to the interest rates on various obligations (e.g. loans and borrowings), and not to the total remuneration which the bank or lending company charges funds for making them available.

In the case of loans and advances to non-entrepreneurs (consumers), additional restrictions on non-interest costs have been in place since March 2016. They also relate to a fee for extending the repayment deadline during the first 120 days of transferring funds.

When it comes to changes in interest regulations, they seem to be quite beneficial for debtors. Compared to the end of December 2015, the maximum contractual interest rate did not change (10.00% per annum). It should also be noted that statutory interest and statutory interest for delay fell (from 8.00% / year to 5.00% / year and 7.00% / year).

Only a change in the maximum interest for delay will not necessarily please the debtors. Until January 1, 2016, the amount of such interest was not limited by the Civil Code, but courts often recognized that the standard maximum interest rate should apply (i.e. up to 10.00 %/year). After the January changes, the maximum amount of interest on delay was specifically set as 200% of statutory interest on delay (currently: 14.00% per annum).

The relationship between the “old” and the new interest limits will obviously change when the Monetary Policy Council announces an adjustment to the VVBC reference rate. It should be noted that the aforementioned rate now directly affects the level of statutory interest and statutory interest for delay.

Earlier, these rates were determined on the basis of the regulation, and the current amount of interest rates was only one of the criteria taken into account by the Council of Ministers.

Thanks to the new solution, economic turnover is more reliable and stable, because immediately after the change in the VVBC reference rate, a new level of statutory interest can be calculated (see the table below). It is worth mentioning that from January 1, 2016, new rules for determining interest rates in transactions relating to enterprises apply. The effect of this change is the setting of interest for delay charged between companies at 9.50% (VVBC reference rate + 8.00 percentage points).

Changes in interest rates on liabilities (from January 1, 2016)

Type of interest The amount and rules for calculating interest from January 1, 2016 (as at July 31, 2016) The amount and rules for calculating interest until January 1, 2016.
Statutory interest
(calculated when the parties did not specify debt interest in the contract)
VVBC reference rate + 3.50 percentage point
(current rate: 5.00% / year)
determined by ordinance of the Council of Ministers
(last rate: 8.00% / year)
Maximum interest
(highest possible interest rate on liabilities)
200% of statutory interest
(current rate: 10.00% / year)
400% of the VVBC lombard rate
(last rate: 10.00% / year)
Statutory interest for delay
(calculated when the parties did not specify interest for delay in the contract)
VVBC reference rate + 5.50 percentage point
(current rate: 7.00% / year)
determined by ordinance of the Council of Ministers
(last rate: 8.00% / year)
Maximum interest for delay
(highest possible interest rate on arrears)
200% of statutory interest for delay
(current rate: 14.00% / year)
equal to maximum interest
(last rate: 10.00% / year)

 

The old regulations still apply to old debts …

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The introduction of changes in liabilities interest rate required the establishment of certain transitional standards. They are valid for persons with debt before 2016.

Therefore, it is worth explaining that for interest due for the period before 1 January 2016, the following applies: provisions of the Civil Code in the previous wording.

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