What Bulgaria’s Euro Adoption Means for Your Loans and Bank Accounts

Bulgaria’s transition to the euro raises many questions about how loans and payments will be handled, especially for those who have agreements in levs prior to the currency change. The Bulgarian National Bank has provided answers.

If you currently have a loan denominated in levs, the outstanding principal will be converted automatically into euros by your bank once the euro is introduced. This conversion will use the official fixed exchange rate and will follow standard rounding rules. Importantly, the core terms of your loan - such as the interest rate, repayment schedule, and maturity date - will remain unchanged despite the currency switch.

Regarding monthly installments on loans originally agreed in levs, these will also be automatically converted to euros at the official rate. The timing and conditions for your loan payments stay the same, and any fees related to the loan will be converted by the bank similarly, without changing your obligations.

If your loan has a fixed interest rate - for example, 3% - this rate will continue unchanged after the euro adoption. In contrast, if your loan carries a variable interest rate, tied to a benchmark or index published by institutions such as the Bulgarian National Bank or the National Statistical Institute, the rate will only change if the original benchmark stops being published because of the currency transition. In that case, the new interest rate applied cannot exceed the level in place before the euro’s introduction.

Customers do not need to close their existing lev accounts or open new euro accounts manually. All bank accounts in levs will be converted automatically and free of charge into euros using the fixed official exchange rate. Furthermore, the International Bank Account Number (IBAN) for these accounts will remain unchanged after the currency switch, ensuring continuity and minimizing disruption.

When the euro becomes Bulgaria’s official currency, all balances in lev accounts will be converted to euros automatically and free of charge, following the fixed exchange rate announced at the time of the changeover. This process has been carefully prepared by banks since 2022, with thorough testing to prevent technical errors or any risk of losing funds. Customers can be reassured that their money is fully protected during this transition.

If you hold both a lev account and a euro account before the currency adoption, the lev account will be converted into euros automatically, resulting in two euro accounts post-transition. Within two months, you can request to close one of these accounts and transfer its positive balance to the other, as long as there are no legal restrictions such as garnishments on the account. Banks will not charge fees for these transfers. However, if the account you want to close has a debit balance or an associated credit card, those obligations must be cleared first. The receiving account will retain its original conditions after the transfer.

Finally, banks are required to clearly display their fees and commissions in both levs and euros. This information must be made available in bank branches and on official websites, allowing customers to stay fully informed about costs related to financial services during and after the euro adoption.

Source: BNB