Volume of Slovak household loans with highest growth in EU

The number of household loans in Slovakia has doubled over the last six years, which represents cumulatively the highest growth in the EU, according to the Slovak Central Bank (NBS). Its analysts attribute this trend mostly to the drop in interest rates and competition among banks. The undue pace at which Slovak households are running into debt continues, with their debt levels being the highest in the region. Slovaks, however, are some of the most disciplined EU citizens when it comes to paying their dues on time. Nonetheless, the excessive levels of debt carry several risks, from the increased sensitivity of households to unfavourable economic developments, the higher probability of financial crises to a stifled potential for economic growth. The Slovak Central Bank therefore introduced stricter measures for loans as of July 1^st. The overall debt will not be allowed to exceed a sum equalling 8 times the loan applicant's annual income. Furthermore, providing loans above 90 percent of the real estate value will be no longer possible as of that date.