Minister Hoekstra (Finance) is introducing this temporary measure – “at least until the end of the year” – so that people who are hit by the corona crisis can borrow money against slightly less burdens. For example, if they just need to replace a broken refrigerator or washing machine at the moment.
Search for balance
Hoekstra calls the reduction to ten percent a “big step”, but also speaks of looking for a balance. On the one hand, he wants to protect people against high burdens, on the other hand, he does not want to make borrowing too attractive, with the risk that people will become too deeply in debt.
Budget institute Nibud has advised the CDA minister to cut interest rates in this crisis to ensure that “vulnerable households are not faced with unnecessarily high costs.”
But Nibud is also vigilant for a “too drastic reduction”. According to the institute, this may lead to certain loans not being offered anymore, or to the maturity of the installments becoming longer, so that people carry the debts with them longer.
Hoekstra wants to introduce the measure “as soon as possible”, the target date is August 1. The reduction applies only to new credits, the interest on existing credits does not have to go down.
It is a temporary measure to study the effects of the lower interest rate. In the meantime, Hoekstra is commissioned by an external agency to investigate a structural reduction in credit interest.
The minister went to look at the interest rates because the House of Representatives urged him to do so. This happened at the beginning of this year when the House of Representatives supported an appeal by the then 50Plus tandem Van Brenk and Krol to lower the ceiling for usury rates on loans.
At the beginning of April, the minister called on banks to lower the interest on overdrafts. Most banks then decided to set that rate briefly below ten percent. But many other credit providers still demand higher interest rates.