Responsible loaning | NKBM

• Clearly define your needs and before borrowing (renting a loan), review your income and expenses and assess your ability to repay the loan. Do an analysis of your monthly income and expenses to see what kind of monthly obligation (annuity) you can afford.

"What about that annuity that you can afford based on your lifestyle?"

• Get the first information about loans on the banks' websites and check loan offers. Choose the most suitable product for you and pay attention to all the costs of the loan, such as the interest rate, approval costs, insurance,... if you decide to become a client of the bank from which you will take out a loan, also check the costs of doing business with this bank (such as e.g. online banking, issuing cards, paying bills, etc.) and also business costs.

"Before making a final decision, visit a bank advisor in the nearest branch, who will be happy to professionally check your calculation."

"Be aware of hidden credit costs (such as credit management costs, credit insurance costs,...)

• "To prepare a concrete offer", go to the bank branch (Nove KBM) to see a bank expert, who will inform you of the basic information about the loan and the necessary documentation.

"Don't rush! Just take your time, carefully consider all options and sleep well. After all, it is a decision that will follow you for many years to come."

• Bring all the necessary documentation and submit the loan application.
• After the credit is approved, read the credit agreement carefully. If you want additional explanations, ask.
• Also consider insuring your credit and yourself.

The purpose of the loan and the correct choice of product

The right choice of product depends on the purpose of using the loan funds. By choosing the right product, you can also save on credit costs. Thus, as a general rule, dedicated loans (e.g. housing credit for the purchase of real estate) are cheaper than cash loans (e.g. consumer credit or cash housing loan).

"Each loan has its own advantages, so it makes sense to talk to a banking expert and choose the right product before deciding to take out a loan. If you are exclusively buying real estate, it makes sense to choose a dedicated home loan, which has a lower interest rate compared to a cash home loan. On the other hand, a cash home loan brings you other advantages, such as 100% payment of funds in cash and free disposal of funds, which can come in handy in case of property adaptation, when you do not know the exact time frames of the investment, and dedicated withdrawals would bring you additional costs in the form of intercalary interest (link to intercalary interest)."

"Improve the offer and pay attention to special offers and benefits. The new KBM offers a lower interest rate for holders of the Komplet Package. In addition, the package already offers a number of services, such as free withdrawals at ATMs, free online and mobile banking, security SMS on the debit card... with which you can really save money on a monthly basis."

The bank will calculate your creditworthiness

• Creditworthiness is the ability to repay the loan and pay the associated interest.
• When calculating your creditworthiness, the bank takes into account that only a part of your salary can be debited (e.g. up to 50% in the case of a consumer credit), and the borrower must have at least the minimum salary left after deducting the monthly obligation (loan annuity). When calculating your creditworthiness, the bank also takes into account your life situation (household expenses, dependent family members)

Calculate how much debt you can afford.

CALCULATOR (budget calculator)

"The amount of the monthly annuity and consequently the amount of the loan will depend on your creditworthiness. However, stick to the rule that you choose a monthly annuity amount that you are sure you will be able to repay regularly on a monthly basis and still live comfortably or according to your lifestyle. You must be aware that a long-term credit will accompany you through various life circumstances".

When you decide to take out a loan, it is also necessary to check what kind of loan insurance is required by the individual bank. At the same time, credit insurance can also affect the price of the credit.

"Nova KBM offers consumer loans without insurance, which means that you have no additional costs with credit insurance, and housing loans with a real estate pledge and a surety as an additional form of insurance (e.g., the pledger is also a guarantor)."

Home loan and own funds

Nova KBM offers housing loans that are secured by a mortgage. The borrower can act as a mortgagor himself or other mortgagors. When the mortgagor is not a borrower, he also acts as a joint guarantor. Joint guarantee means that the joint guarantor guarantees the repayment of the loan in the same way as the borrower.

Own resources

As a rule, the borrower must have his own funds to purchase real estate, because the bank credits up to 80% of the value of the real estate being mortgaged. The value of the property is determined on the basis of a valuation report by an authorized appraiser. Exceptionally, in the case of a housing loan of up to EUR 20,000, the bank considers the GURS assessment.

"If the borrower does not have his own funds, he can pledge an additional property and thus obtain 100% financing of the investment."

The most common insurances required by banks:

• Cost of risk assessment
• Payment of the insurance premium
• Personal guarantee
• Mortgage of real estate
• Pledge of bank deposits
• No insurance
• Rest assured
• at the bank's discretion

SISBON – verification of your business with other credit providers

Before concluding the loan, the bank will check your current and past transactions with the bank and with other banks or financial institutions. The bank will check operations with other banks and other financial institutions (members of Sisbon) on the basis of insight into SISBON.

"Your business in the past and today affects the decision to grant credit today or in the future. That is why it is very important to pay off your obligations regularly. Even the blocking of your transaction account due to the blocking of the TRR (e.g. also due to minor enforcement) can affect the decision regarding credit approval"

Sisbon is an information system that was established with the aim of managing the credit risk of banks, savings banks and other lenders to ensure responsible lending and prevent over-indebting of individuals (source: http://sisbon.si/sl )

One of the most important decisions before renting is to familiarize yourself with the costs of the loan or credit price. That is why it is important to check different offers from banks before taking out a loan, and when comparing different offers, information about the effective interest rate - EOM (make the comparison based on the same amount and term of the loan) is important.

"EOM shows the actual price of the credit and is shown as the total cost of the credit, which includes interest and all bank costs associated with the credit, such as e.g. TRR credit management approval and insurance costs, approval costs, credit management costs, credit insurance costs,....”

IMPORTANT: in the case of loans secured by a real estate pledge, costs associated with the credit agreement are also incurred, which are not included in the total cost of the loan

• notary fees,
• real estate appraisal costs,
• interest and costs paid by the borrower due to non-fulfillment of obligations under the credit agreement (these costs are not included in the EOM for consumer credit),
• life insurance costs of the borrower,
• the costs of insuring the pledged property to the insurance company

"Also pay attention to other operating costs that are not included in the cost of the loan, but affect your expenses, such as running an electronic bank, paying bills, sending SMS notifications, issuing and managing deferred payment cards... all this also affects your expenses."

one of the most important items of the credit price is the interest rate, so the decision regarding the choice of interest rate is very important. Nova KBM has different interest rates on housing loans, namely variable, fixed and compound interest rates, while consumer loans have a fixed interest rate.

Fixed interest rate:

The interest rate does not change during the term of the loan, which means that the customer pays the same amount of monthly annuity every month for the entire loan repayment period and thus knows with certainty what the total interest will be paid during the term of the loan.

Variable interest rate:

The interest rate is variable and is equal to the sum of the reference interest rate 6M EURIBOR and the fixed interest margin. Variable interest rate: it consists of the 6-month EURIBOR and a fixed mark-up, which means that the interest rate and consequently the annuity change every 6 months to the extent that the 6-month EURIBOR changes. If the EURIBOR is negative, the negative Euribor value is taken into account when calculating the total interest rate, which means that the bank subtracts the negative value from the interest margin.

IMPORTANT. "The credit interest rate for your loan may change during the term of the credit agreement, depending on the movement of the reference interest rate EURIBOR. The value of EURIBOR is currently very low (even negative), so it is to be expected that in the future (during the loan repayment period) there will probably be an increase in EURIBOR, and thus also an increase in the monthly obligation. This means that the amount of your loan payments can also (significantly) increase or decrease. The increase in the amounts of your loan payments may even be such that you will not be able to repay the loan based on your income. In the event of a delay in repaying the loan, the lender may, in accordance with the contractual provisions, initiate reminder and/or collection procedures."

Example of an annuity change in the event of a change in the 6-month EURIBOR for a loan in the amount of EUR 100,000 and a maturity of 240 months):

Compound interest rate

The interest rate is a combination of fixed and variable interest rates. A compound rate loan has an initial fixed interest rate followed by a variable interest rate. The fixed part is arranged with two time interval options – 5 or 10 years. The bank can also offer the customer a continuation of the loan with a fixed interest rate, but at the current interest rate. Regardless of the EURIBOR value, the annuity remains unchanged during the term of the fixed rate loan.

The risks you are exposed to when you decide to take out a loan.

• Interest rate risk (pop up with mouse slider)
• Currency risk. pop up with mouse slider)
• Liquidity risk. pop up with mouse slider)
• Risk of loss of property. pop up with mouse slider)
• The risk of greater financial burdens (when choosing a loan with a variable interest rate).

Borrowers' life insurance, PPI...NINA

Possibility of early loan repayment

The customer has the option of early repayment of the loan at any time .

Regular fulfillment of obligations from the credit agreement

The borrower has the obligation to pay the credit in accordance with the credit agreement. If he is late with payments, the bank sends him a reminder. In the event that the borrower does not settle his obligations even after being asked by the bank, the bank has the option of withdrawing from the credit agreement and starting recovery procedures.

Possible consequences of non-fulfillment of obligations from a credit agreement for real estate

The bank can withdraw from the credit agreement for real estate with a unilateral statement and demand payment

the remaining obligations before their maturity in the event that the borrower is late with the payment of two

consecutive monthly obligations (annuity or installment) and with a minimum value of 3% of the remaining amount of the loan. Non-fulfillment of credit obligations under the credit agreement may lead to the loss of the pledged real estate. Also, settlement of obligations under the credit agreement outside the agreed payment period of the monthly obligation (annuity or installment) can lead to delays. In such a case, the amount of overdue unpaid obligations bears interest at the statutory default interest rate, and additional costs arising from reminders are also incurred.

What to do when there are problems with repaying the loan (link to the story about restructuring)

Taking out a home loan or other loan secured by real estate is one of the most important decisions in the field of financing. But unforeseen events can happen in life, such as job loss, reduction of personal income, etc., which can significantly affect your ability to regularly settle the obligations of the borrowed loan. Delays in the settlement of obligations mean non-fulfillment of credit obligations and consequently withdrawal from the contract, which can also lead to the loss of the mortgaged real estate.

In such cases, it is crucial that you inform us of the changed life circumstances in time, so that together we can find an appropriate solution and possibly prevent the insurance from being cashed out.

"Therefore, it is crucial that the borrower, as soon as such a situation or a changed life circumstance occurs, and knowing that he will not be able to settle his obligations to the bank according to the agreed repayment plan, tries to agree with the bank on a different way of repaying the loan.

In the event of a delay under a credit agreement for real estate, it must be in the interest of both parties to prevent the realization of the collateral."

Possible solutions

The borrower can obtain all information from the bank free of charge regarding the delay in payment of due obligations from the credit agreement and help in choosing the most favorable solution for him. Depending on the circumstances, the following are possible ways of resolving the consumer's overdue obligations under the credit agreement for real estate:

• Moratorium
• Credit reprogramming
• Debt assumption
• Access to debt

Link to the document.