Many of the old creditors are unaware that they have the opportunity to convert their credit to a more favorable one. So it is worth looking at the branch offices for the conditions under which you can get rid of your old type of loans and change the entire debt again.
Can I switch to Forint?
This option may be of particular interest to those looking to convert their foreign currency loans into forint loans to make repayment more predictable. Foreign currency debtors are also free to convert to new forint loans that comply with the new regulations, but they can even stay in their own currency or even switch from franc loans to euros.
The question is, is it worth it for foreign currency creditors?
The interest rates on foreign currency and forint loans do not differ significantly, so creditors have to face practically the same repayment even after the change. Risks, on the other hand, change as you do not have to worry about the weakening of the forint.
Instead, you may be afraid of changing interest rates, whose risk is much higher than forint loans, as the benchmark may easily move up from its historical low. The only way to protect against this is to choose a long-term fixed-rate loan that changes interest rates over a period of 3, 5 or even 10 years, as the business environment changes.
However, with forint conversion, you have to give foreign currency creditors several options. On the one hand, they will no longer be able to benefit from favorable exchange rate fluctuations and thus be excluded from any further foreign currency loan bailouts. In recent days, the European Court of Justice has ruled on the unfairness of the exchange rate gap used to repay foreign currency loans, which may give new debt to hope families, though it is estimated to be a few hundred to thousands of forints a month.
It’s a good idea to check with your branch
In conclusion , it’s a good idea to check with your branch if you have an old type of loan. In the case of forint loans, make sure to switch if you find more favorable terms. However, in the case of foreign currency loans, the issue is more delicate and requires careful consideration.
We could get rid of the risk of further forint depreciation for free, but we would also lose the potential benefits. The events of the coming months may help you make the decision.