Romanian people prefer "borrowing lei"

According to a study presented by the Financial Companies Association at a conference on Thursday, the appetite of the Romanian people for loans in lei has increased.

The problem is that when they want to apply for a loan, the Romanian people take this decision based on the annual percentage rate of charge, but a quarter of them do not know what this interest rate represents, and more than half of them misunderstand this indicator.

According to the survey undertaken by Novel Research, 22 percent of the Romanian people consider that they have their personal budget under control, 14 percent say they are not good at managing their finances, while 52 percent say that they are doing relatively well in this field.

Almost three quarters of those surveyed keep records of their expenses in one way or another, but only 24 percent of them keep records of their expenses.

As for loans, surprisingly, more than 84 percent of the Romanian people prefer borrowing lei and almost 80 percent want a fixed interest rate loan.

The authors of the survey consider that the latter preference may come from the fact that almost half of the respondents did not understand the concept of floating rate and how it is calculated.

Regarding the annual percentage rate of charge, which reflects the annual total costs of a loan, things do not look good.

Although 82 percent of the Romanian people base their decision to contract a loan primarily on the annual percentage rate of charge, 31 percent of them do not know what that is, and 52 percent of them misunderstand this indicator.

It would be interesting to mention that those who admit to not being good at managing their finances consider that if they cannot pay rates, the main responsibility belongs to the creditor institution.

Those who think they are in control of own budget assume the total responsibility on this, while the Romanian people who say that they are relatively good at managing their finances, think that the responsibility is divided relatively equal between the creditor and the debtor.

Translated by: Denisse-Meda Bucura
MA Student, MTTLC, Bucharest University