Interest Rates – All About Them and More

The most common distribution of citizens’ loans is by purpose and maturity. Loans that have a repayment period of more than one year are considered long-term loans, whether they are non-purpose loans (cash, mortgage, pawnshop…) or special purpose loans (consumer, residential, vehicle loans…).

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Given that citizens generally repay long-term loans, we can largely express the cost of borrowing money from a bank at an interest rate.

The article deals with the subject in detail. If you’re just looking for the best line of credit and don’t have time to read, you can fill out a credit questionnaire right away.

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Basic interest rate


The loan is repaid at the agreed term, at an agreed, nominal interest rate. The effective interest rate covers a wider range of borrowing costs.

In addition to the nominal interest, it includes various fees that the client pays to the bank when granting a loan. The method of calculating the effective interest rate is unique to all banks.

Arranging a longer loan repayment period reduces the monthly annuity, but increases the total amount of interest paid to the bank.

View total repaid interest by arranging different loan repayment periods. The agreed loan amount is € 60,000.00 with an agreed interest of 5.75%:

By arranging for a longer loan repayment period, you will pay double interest to the bank, in the case of a favorable interest rate.

Interest rates on offer since 2013


Banks’ offers include loans that can be contracted at a fixed or variable interest rate. The fixed interest rate is fixed throughout the life of the loan.

According to the practice introduced in the first half of 2013, the variable interest rate on retail loans consists of a fixed and variable component.

The fixed portion of the interest rate is unchanged throughout the repayment period of the loan. The variable part of the interest depends on the average cost of acquiring banks’ sources of cash. A fixed six-month reference rate is used to determine the variable portion of the interest rate. Most often EURIBOR or NRS (national reference rate).

The NRS shows the average cost of financing the Croatian banking sector in each currency (HRK, EUR) for a specified maturity (3, 6 or 12 months). Euribor represents the average interest rate on non-performing interbank loans in Europe over a fixed maturity period.

The height of the euro area euro area money market is largely influenced by the monetary policy of the European Central Bank.