Strong collateral, a lower rate
The more collateral you offer, the less risk the bank sees — and the lower the interest rate you get.
How it works
The interest rate is a mirror of the bank's risk. The more confident it is that it's not exposed, the more it lowers the rate. In Greece, the two main forms of collateral are a property pre-notation and a cash pledge.
Property pre-notation (mortgage)
A written agreement that gives the bank the right to sell the property if the loan is not repaid properly. Because prices can change, the bank usually asks for collateral of around 120% — e.g. a €120,000 property for a €100,000 loan. It is the most common form of collateral.
Cash pledge
For those who don't want to touch their money. You pledge a guaranteed-capital deposit (a term deposit, a bancassurance product, etc.) and receive a loan of the same amount. The bank eliminates its risk and gives you preferential pricing — while your money may earn more than the loan's interest rate.
