Bankers continue to use monthly fees calculated as a percentage of the outstanding loan to cover a share of the overall cost of the loan, although the times when banks used to fight the battle of promotional offers, with as low as possible nominal interest rates, are long gone.
The value of the monthly fee depends on the bank. For instance,
BCR, the biggest bank on the Romanian market, charges a monthly fee
of 0.02%, but it is always calculated based on the initial value of
the loan.
At the BRD, the second-largest bank on the market, the fee is 0.1%
of the volume, payable on a monthly basis. This takes the annual
cost to 1.2%, compared with a 3.98% nominal interest rate per
year.
“The logical explanation for calculating the fee as a percentage of
the loan volume is directly connected to the risk involved. For a
1,000-RON loan, checks are not made on a monthly basis at the NBR
and at the Credit Bureau to see how the client is faring, but they
are compulsory for high-value loans. There are activities which are
not seen, but which cost quite a lot. For small loans the risk is
small, and the bank takes it on,” says a banker in justification.
However, all this makes it difficult for consumers to compare the
real cost of loans offered by rival banks, especially since the law
does not force banks to display their annual percentage rate for
mortgage-backed loans. Under the circumstances, the best solution
remains to compare the repayment schedules that banks are required
to supply before the signing of the contract.