The Greek Supreme Court has published its ruling on non-performing loans, determining that interest should be calculated on each monthly installment rather than on the total loan amount, vindicating borrowers who had been included in the Katseli Law framework for the protection of their primary residence.
The Plenary Session of the Supreme Court, by a strong majority, ruled in favor of Katseli Law borrowers regarding the calculation of interest, despite opposition from investment funds that sought to have interest calculated on the entire outstanding debt.
Calculating interest on each installment reduces the final debt burden, whereas calculating interest on the entire principal significantly increases the amount owed.
A loan is considered “non-performing” when the borrower is unlikely to repay it or has failed to make agreed payments for more than 90 days.
The ruling affects approximately 350,000 borrowers whose loans exceed €12 billion, as their loan installments are now expected to be substantially reduced. The new calculation method determines the total amount borrowers will ultimately have to repay, making debt restructuring arrangements more sustainable.
In practical terms, the ruling places limits on interest accumulation and provides a powerful legal tool for borrowers, including those who were not enrolled in the Katseli Law framework, as the decision is expected to be cited in lawsuits, out-of-court settlements, and future legal arguments.
The case was heard by the Plenary Session of the Supreme Court on February 27, 2025, following conflicting rulings issued by lower civil courts.
Sources: Εφημερίδα των Συντακτών, ΑΠΕ-ΜΠΕ, Καθημερινή, Βήμα
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