The number of those who refinanced their loan under better terms with the same bank is however slightly higher and exceeded 41,000.
In May, the number of those who went to another bank to refinance older debt exceeded the number of clients who accepted their own bank’s offer. Around 15,700 people refinanced their loans with a different bank in May and only 13,200 went to the same bank.
“The number of external refinancing loans tripled in May this year compared with the level registered in 2009 and 2010. The increase was higher than that of internal refinancing. This shows that the mobility rate of bank clients has surged,” according to a Competition Council report.
Bankers’ fight to attract clients formerly “prisoners” of competition, stuck in contracts with high interest rates, started in the summer of last year, after the elimination through Ordinance 50 of the early repayment fee, which had up until then been the main hurdle to refinancing.
Clients, however, often accepted better contract terms from the bank that sold them the loan, without looking for refinancing solutions to competition. This was reflected in the higher number of internal refinancing as opposed to external refinancing recorded until May.
But competition among banks has gradually sharpened, given that demand for new loans remained weak. Bankers became more active in their attempt to lure clients from competition, hoping to attract the necessary amounts to cover the original value of the loan and grant them an additional amount.
“As of March this year, the number of refinancing loans boomed compared with the previous few months, as a result of the new lending offers from banks,” reads the report of the Competition Council.
Around 160,000 Romanians took out refinancing or debt consolidation loans with a cumulated value of over EUR850 million (3.6 billion lei) from July last year until the end of May 2011. Their number was double compared to that recorded between June 2009 and May 2010, according to the Competition Council.
(English version by Daniela Stoican)