Interest rates

The applicable default interest rate is the rate defined in the Civil Code. Default interest rates are defined for two client/lessee groups. One group comprises legal persons, being corporations, craft undertakings and sole traders, and the other rate (normally lower) applies to natural persons.

Statutory default interest rates are periodically revised and new rates apply as of the date the Croatian National Bank publishes the average interest rate. Default interest rate is calculated as the average interest rate plus 5% for the first lessee group (legal persons) and 3% for natural persons. 

Indexation is performed on a quarterly basis because it is based on the trends of the relevant 3-month index (EURIBOR, CHF LIBOR), so lease installments are indexed to newly applicable interest rates. The interest rate is variable and comprises the index and the margin. Both elements are variable and the indexation only makes an adjustment for the change in the index value. These variations operate both ways (upward and downward).