Estonia, Financial Services, Legislation, Loan

International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 14:23

Estonian Riigikogu bans excessive instant loan interest rates

BC, Tallinn, 19.02.2015.Print version
The Estonian Riigikogu passed with 74 votes in favour law amendments, according to which, instant loan agreements with unreasonably high fees are automatically null and void and which does not allow the settlement of disputes concerning instant loans in arbitration court, LETA/Postimees Online reports.

The law amendment specifies that the credit agreement is null and void if the customer's credit cost rate exceeds the Eesti Pank-published last six months' average cost rate of consumer loans, issued by credit institutions to private consumers, more than three times.

 

The law amendments are aimed to protect the rights of consumers, and ensure that the consumer should not bear disproportionally high costs based on consumer credit agreement (e.g. interest, commissions, etc.).

 

Also, the changes are aimed to reduce the number of people who get into payment difficulties. The registry of insolvent persons includes more than 34,000 people who have trouble paying back an instant loan.

 

The law comes in force on July 1, 2015.

 






Search site