Interest rate spread

The interest surcharge is usually the part of the interest on variable interest loans that the bank can decide to change. The bank can also apply an interest rate premium when the borrower for some reason poses a greater risk to it than a typical borrower.

We are talking about interest spread in generally variable interest when the interest rate consists of two parts: the reference interest rate and the interest rate spread. It is the sum of these two items transaction interest, which is provided by the specific borrower credit interest actually payable after the contract. In this setup, the reference interest rate is usually some nominal, guiding interest rate, and typically one of them central bank notes the changes in market interest rates and publishes them regularly. The reference interest rate is embodied by term market changes occurring during the period, the risk of the development (increase or decrease) of the general interest rate environment. 

On the other hand, the interest surcharge embodies the risk calculated for the given type of loan or for the borrower himself. When a bank announces a loan scheme, for example for catering units, it calculates a non-payment risk that is generally typical of catering businesses. This is the basis for determining the interest surcharge on the reference interest rate. 

In addition, the bank can think that ice cream parlors, for example, represent a special level of risk within the caterers, because its experience is that there are more defaults or non-payments or late payments in this area. In such cases, he can also say that the borrowers who set up the ice cream shop should pay an interest surcharge of a few tenths of a percent in addition to the interest surcharge announced for the catering units, because for him, knowing the business in question, this is how the loan is worth it. 

In addition, the bank can also establish an interest margin based on the specific circumstances of the given loan. This can happen, for example, if a private borrower cannot prove his income for a whole year, but only for a few months. 

Regardless of how the bank determines the interest margin, the point is that in the case of variable interest, the financial institution itself decides on the amount of the interest margin. If you believe that catering will be riskier in the future, because the number of consumers able to pay restaurant prices in the country will decrease, even as a result of a crisis, you can increase the interest rate on the catering loan. In the event of a contrary assumption, you can also reduce the interest margin.