Loans still under active judicial restructuring arrangements under Greece’s Katseli Law have entered a new regulatory framework. A legislative amendment by the Ministry of Finance—introduced following a decision by the Plenary Session of the Supreme Court (Areios Pagos)—changes how interest is calculated on these loans.
Which Loans Are Covered?
The revised rules apply only to Katseli Law loans where there is an active judicial rescue plan for a primary residence, the debt has not yet been fully repaid, and the debtor has not been excluded from the arrangement due to non-payment.
For these cases, interest will no longer be calculated on the entire outstanding principal of the debt. Instead, it will be applied solely to the monthly instalment set by the court—a significant shift that reduces the borrower’s monthly burden.
Who Is Excluded?
The retroactive mechanism does not apply to cases already concluded—or where debtors have been formally excluded from the arrangement. It also excludes extrajudicial restructuring schemes, as well as arrangements under Law 4605/2019. For those, the existing method remains in place: monthly payments are still treated as amortising instalments, with interest calculated on the full outstanding debt amount.
The Key Criterion: Active Status
The central condition is whether the judicial arrangement remains active. This means the debtor continues making payments in line with the court order, and has not lost protection due to prolonged default. Only in such cases does the new interest calculation apply—leading to lower monthly payments, since interest accrues only on the instalment itself, not the total debt.
No Cash Refunds—But Credit Against Future Payments
Debtors who previously paid higher amounts—because interest was calculated using the older, more burdensome method—will not receive cash refunds. Instead, the excess paid will be recognised as capital already settled and deducted from remaining instalments or the final balance of the debt.
Example 1: €90,000 Debt
For a €90,000 loan over 240 months at 3.6% annual interest:
- Under the old method, the monthly payment would have been approximately €527.
- Under the new method, it drops to around €376—comprising €375 toward principal and just €1 in interest (calculated only on the monthly amount).
- The monthly saving is roughly €151.
If this debtor had paid the higher amount for 24 months, they would have overpaid by about €3,624. That sum won’t be refunded—but it will reduce future obligations. Practically, it could eliminate roughly nine or ten of the final €376 instalments.
Example 2: €120,000 Debt
For a €120,000 loan over 300 months at the same interest rate:
- The old amortising payment would have been around €607.
- The new instalment falls to approximately €401—€400 toward principal, plus minimal interest.
- The monthly difference is nearly €206.
As with the first example, any overpayment made before the change will offset future dues—not trigger a direct refund.