Taking out a loan at a time of high price growth might not be a bad idea at all. As UniCredit Bank spokeswoman Zuzana uáková points out, under certain circumstances it is possible to use inflation to one’s advantage, and with a reasonable amount and period of commitment, a loan can be a good choice, especially in times of inflation. “The loan amount loses value due to inflation. This is disadvantageous for your savings, on the contrary, it benefits the debt,” she said. Nonices are opening This is also confirmed by data from the National Bank of Slovakia (NBS). The average interest rates on newly granted loans are relatively stable in Slovakia this year, while the growth of consumer prices is constantly accelerating. So far, the gap between loan prices and price growth has been significantly widening. This applies especially to real estate loans, as shown in the graph above. A similar situation, but with traditionally higher interest rates, also applies to consumer and other loans for households. Although banks are more cautious when granting new loans and gradually increase interest rates – especially on longer maturities – the gap between interest rates and inflation will probably remain open for some time. We should probably not get rid of double-digit inflation so soon, and the expected increase in interest rates should be gradual. A difference of more than 10 percentage points According to the most recent data of the central bank, the average interest on newly granted real estate loans for households with a maturity of more than 5 years in July reached just over 2.5%. Inflation in July was 13.6%. With shorter loan maturities, the interest rates were even lower. For consumer and other loans, the difference between inflation and interest is smaller, but it is still definitely interesting. With the longest maturities of loans over 5 years, interest on new contracts reached over 7% in July. That is roughly half the level compared to inflation. Even with consumer loans, the interest on newly granted loans is currently lower with shorter maturities. Of course, an important factor is especially what we will use the funds obtained from the loan. According to UniCredit Bank spokeswoman Zuzana uáková, a good point of reference when deciding on a loan is the life of the thing in which we invest or its added value. “It is not reasonable to rely on a higher standard of living that does not correspond to your means, and therefore not to the repayment possibilities,” he advises. Ideal company for investing in energy savings? In general, it is good to buy if you know that this money will help you save or even earn somewhere else. An example could be warming the house or buying tools that you won’t have to buy for money. “With loan funds invested in this way, their effective return is evident,” he claims. The gap between interest rates and inflation can be used, for example, to increase household energy savings in a complicated situation. i.e. photovoltaics on the roof, heat pump, wood boiler, insulation and the like. We also know how to invest in energy savings in apartment buildings, for example by replacing windows and appliances with more energy-efficient ones and switching to smart home technologies – thermostats, sensors and sensitive regulation of electricity consumption. “The transition to efficient energy sources or an intelligent household means a higher initial investment, but a higher return in the long term,” added uáková.