Next year, we may witness tax increases and higher property taxes, warn the guests of the podcast hosted by the Alternative Banking Dispute Resolution Center (CSALB). These effects will lead to a decline in consumer spending, which could impact the entire economy. In such conditions, pressure on Romanian incomes will increase, and people need to secure their personal finances as best as possible. Experts recommend saving, maintaining a low level of debt, and keeping an ongoing dialogue with the bank to prevent difficult situations. In the 10th episode of #PodcasturileCSALB, guests include Ana Popescu, Retail Director at Unicredit, and Ionuț Ștefan, CSALB conciliator and tax consultant, in a discussion moderated by Adrian Asoltanie, trainer and financial education specialist.

| PODCAST CSALB | https://youtu.be/j1jmdhhV4Go

This is the 4th year that top banking system management and legal experts participate in CSALB interviews. This year, renowned economic journalists are also invited to discuss key banking topics within the Alternative Banking Dispute Resolution Center (CSALB). We analyze the latest developments and their impact on the financial-banking market, as well as the relationship between consumers and credit institutions in a volatile and unpredictable socio-economic context.

 „In the context where the excessive deficit procedure remains open, as announced by the European Council, and the budget deficit remains at a high level that cannot be sustained in the coming years, the risk of increased taxation in 2025 is very high.

Private consumption has grown significantly this year and will likely continue to rise until the end of the year, supported by salary increases and declining inflation. However, potential tax hikes, such as VAT increases, higher profit or property taxes, will strongly curb consumption next year.
The volume of new loans issued in the market in the first eight months of the year has increased by almost 70% compared to the same period last year, both for consumer loans and mortgages. We are seeing a higher concentration in refinancing.

Clients are refinancing existing loans with products offering lower, fixed interest rates. Banks have introduced very competitive fixed-rate offers for mortgages and consumer loans. For example, there are fixed-rate loans on the market below the IRCC value. I believe this also reflects the banks’ willingness to offer viable long-term solutions because we want a healthy relationship with our clients.

This credit growth may continue into 2025 in the mortgage sector, but it will slow down for consumer loans, considering the potential impact on real incomes next year due to increased taxation.”

„To avoid difficulties, consumers must take a more cautious approach to loans. Some people walk into a bank and ask, ‘What is the maximum amount the bank will lend me based on my salary?’ But they don’t consider that this maximum amount also includes costs like notary fees, furnishing, renovations, and interest or income fluctuations. So, the maximum is never healthy! A few recommendations: the monthly installment should not exceed a quarter of your monthly income, and the value of the home you buy should be approximately equal to your four-year income. Saving should also become as regular as brushing your teeth. The lack of savings isn’t felt immediately but years down the line. However, saving should be approached strategically: the habit of putting aside whatever is left at the end of the month won’t help much. What personal finance elements give consumers a better score and better conditions when accessing a loan?”

„A bank looks at payment history, ensuring there were no issues with the bank relationship, that the client has a stable income, and, of course, an appropriate level of debt. Repayment discipline is important in the long term, as a current payment issue can affect the ability to get a loan in the future. Now, we might forget to pay a small consumer loan, but this will cost us in a few years. For a bank, the relationship with its customers is very important. Because they receive or make transactions through the bank, they are rewarded: with discounts on the entire range of services, free accounts, cash withdrawals, electronic payments, or mobile banking services.

When taking out a loan, consumers should consider all elements that influence financing costs, such as fees and associated insurance. Additionally, they should evaluate the facilities offered by the bank to consumers, like ease of making early payments and the possibility of doing so online.”

„When thinking about a loan, you need to know exactly what your monthly costs will be and calculate your debt ratio, taking into account essential expenses. Before getting a loan, you should also anticipate the possibility of unexpected events, such as health issues or family events, that could affect financial resources and the ability to repay the loan. These unpleasant events are often cited in requests sent by consumers to CSALB.

For a bank, the customer’s saving behavior is also relevant, contributing to a higher score for accessing a loan. If the bank sees that someone has set aside 10 lei, it assumes they could pay a 12 lei installment.’
‘I also foresee a difficult period from a fiscal perspective. I believe we’ll be reading the Official Gazette under the Christmas tree, checking for any changes to the Fiscal Code. As in recent years, most fundamental legislative changes appear between December 23 and 31, a time when people can more easily swallow bad news. I expect a VAT increase, considering its significant share in state revenue. However, this increase will have direct consequences on consumption and the reshuffling of personal priorities. We will certainly see problems with the repayment of existing loans.” 

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 About ABDRC: ABDRC is an entity set up under a European Directive, and intermediates, free of charge and in not more than three months, negotiations between consumers and banks or NBFIs, for contracts/agreements in progress. Consumers from any county of the country may file applications with the Alternative Banking Dispute Resolution Centre (ABDRC) filling-in an online form directly on the website www.csalb.ro. Once the bank accepts to enter the conciliation/negotiation procedure, a conciliator is appointed. ABDRC works with 17 conciliators, of the best specialists in law and with relevant experience also in the financial and banking field. Everything is settled amicably, and the understanding between the parties has the power of court judgment. More information about the work of the Centre is available by phone at 021 9414 (charged a normal rate).