After a period of active lending in Slovakia, there are more cases where people cannot repay consumer loans on time. According to the National Bank of Slovakia (NBS), the share of problem loans has increased from less than 7% to 8%. Experts warn: borrowing money to maintain your usual standard of living is a dangerous strategy that can lead to serious financial difficulties.
The increase in the number of non-performing loans is a worrying sign. In the last two years, the volume of new consumer loans has increased by more than 11%, and in three years – by almost 20%. This significantly outpaces the average rates in the European Union. The problem is complicated by the fact that such loans have a relatively high average interest rate of 9% and a short repayment term – up to eight years.
Why is debt increasing?
Experts link the negative trend to several factors. Firstly, the rising cost of living and higher interest rates are putting pressure on family budgets. Secondly, population incomes are growing more slowly than before, which reduces the financial stability of households.
"We are observing increased sensitivity among some borrowers, as they face higher living costs, higher interest rates, and relatively slower income growth than in the previous period," explains Vladimír Dvořáček, Executive Director of the NBS's Supervision and Financial Stability Department.
Often, people take out consumer loans for non-essential items: a new phone, a vacation, or repairs. This creates an illusion of financial well-being, but in reality, it only deepens the debt trap.
When to take a loan and when not to
Financial advisors recommend carefully considering every borrowing decision. The main rule is to take a loan only for something that has long-term value or can be sold in case of financial difficulties.
When a loan may be justified:
Education or professional development. Investing in your own knowledge can pay off in the future through a better job and a higher salary.
Urgent medical needs. When it comes to health, a loan may be the only option.
Major household appliances. A refrigerator or washing machine are essential items, and if your old appliance suddenly breaks down, a loan can help.
When it is better to refuse a loan:
For a vacation, wedding, or expensive gifts. Such expenses do not create assets, they only leave debt behind.
To cover daily expenses. If you don't have enough money for food or utilities, a loan will only temporarily mask the problem, not solve it.
For impulse purchases. A new gadget or designer clothing bought on credit will quickly lose value, but the obligation to pay will remain.
Economist Pavel Škriňár from the University of Economics in Bratislava advises: "I would not take a consumer loan for things that I cannot monetize later. That is, if I found myself in a situation where I couldn't repay the loan, I should be able to sell what I bought with it and use that money to pay off the debt."
How to avoid the debt trap: practical advice
Create a budget. Clearly track your income and expenses. This will help you understand where your money is going and find opportunities to save.
Build a financial cushion. Try to save at least 10% of your income. A reserve for 3-6 months of living expenses will help you get through unexpected difficulties (job loss, illness) without needing to take out loans.
Compare offers. If you decide to take out a loan, do not accept the first offer you get. [Compare conditions at several banks], paying attention not only to the interest rate but also to the annual percentage rate (APR), which includes all fees and charges.
Do not refinance. Taking out a new loan to pay off an old one is a direct path to a debt spiral. If you have problems with payments, it is better to contact the bank and ask for debt restructuring.
Inability to pay a consumer loan on time can seriously damage your credit history. As [the STVR portal reports](https://spravy.stvr.sk/2026/07/slovaci-coraz-castejsie-nezvladaju-splacat-spotrebitelske-uvery-odbornici-varuju-pred-zbytocnym-zadlzovanim/), this can create significant obstacles in the future if you want to take out a larger loan, such as a mortgage for housing.
