When debt turns bad: Multiple loans and risks to financial stability – Luka Sovulj, CNB

Published: 13/5/2026

This episode of the HNB Podcast discusses multiple or parallel loans – we talk about the characteristics of these loans, their appeal to borrowers and risks they pose to consumers and banks with Luka Sovulj, a senior associate in the CNB's Macroprudential Policy and Financial Stability Department, who has researched this topic.

Sections:

00:59
Section 1: What are parallel loans?
The term parallel loans refers to a situation when borrowers are within six months before or after the disbursement of a housing loan also disbursed a non-housing loan.
02:55
Section 2: What is the difference between borrowers with housing loans only and those who opt for both housing and non-housing loans?
The average income of borrowers who take out non-housing loans in parallel with housing loans is about 600 euro lower than the income of borrowers with housing loans only. However, these results should be interpreted with caution, as the income of borrowers often includes the income of co-borrowers.
05:48
Section 3: Banks quite rigorously check the creditworthiness of clients who apply for housing loans. Still, it seems that borrowers with housing loans have relatively easily been granted non-housing loans too. Is there a loophole in the regulatory framework that needs closing?
Before the CNB imposed macroprudential restrictions on consumer lending criteria, which apply both to housing and non-housing loans, housing loans had been much more tightly regulated – the assessment of consumers’ creditworthiness had been stricter. However, since 1 July 2025, the date when new measures started to apply, the minimum criteria for a non-housing loan, that is, the maximum indebtedness indicators, have become even tighter. This should be reflected in the new data for the second half of 2025 and onwards.
07:41
Section 4: Are borrowers taking out more and more parallel loans year after year, in line with the rise in real property prices?
In the last few years, on average slightly more than 16% of housing loan borrowers have also taken out a non-housing loan. In 2022 and 2023 this share dropped to 15%, the lowest level in the previous four years, but it rose slightly in 2024, reaching 18%.
09:19
Section 5: Some non-housing loans have been disbursed before housing loans. Does this mean that these loans have been used as down payment for the purchase of residential property?
Approximately one third of non-housing loans have been taken out before housing loans, which suggests that these funds are sometimes used as down payments for the purchase of residential property. Another third of non-housing loans is paid out in the same month as housing loans and the remaining part is paid out later.
11:19
Section 6: Do borrowers more often take out parallel loans from the same bank or from different banks?
Most borrowers with parallel loans take them out from the same bank. The bank that is already familiar with their financial situation can offer safer conditions and consumers avoid additional costs and uncertainty.
12:39
Section 7: Do data indicate that borrowers opting for parallel loans have more difficulties with the repayment of housing loans?
Borrowers opting for both housing loans and non-housing loans have proved to have more difficulties with loan repayment. For example, at the end of 2024, the share of non-performing loans of borrowers with housing loans only in the cohort of housing loans granted in 2021 was on average slightly below 0.5%.