Hitel

Hitel is the Hungarian term for a loan or credit extended by a financial intermediary to a borrower. It describes both the act of lending and the resulting debt contract, in which the borrower receives funds and agrees to repay the principal plus interest over an agreed period. The lender is typically a bank or other financial institution; the contract specifies the loan amount, interest rate, repayment schedule, fees, and any collateral.

Common types include consumer loans (személyi hitel), housing loans (lakáshitel), auto loans (autóhitel), and business loans (vállalati hitel). Loans can be secured (with collateral such as real estate or other assets) or unsecured. Secured loans usually offer lower interest rates but require collateral; unsecured loans carry higher risk for the lender and often higher rates. Some facilities are revolving lines of credit (keret) rather than fixed-term installments.

Costs and terms: The total cost is expressed through the teljes hiteldíj mutató (THM), which includes interest and fees. Repayment may be in fixed installments or another schedule. Timely payments affect creditworthiness and future access to credit; late payments can incur penalties and may lead to default.

Regulation: In Hungary, lending is regulated by the Magyar Nemzeti Bank (Central Bank of Hungary) and consumer protection laws, aligned with EU directives on consumer credit. Lenders are typically required to assess a borrower’s ability to repay and to disclose terms clearly.