Banks, Estonia, Financial Services, Legislation, Loan

The justice ministry said that the law amendments stipulate that loan-takers now have a bigger obligation to check whether a person taking the loan is capable of paying it back. This means that starting July, the loan-giver is obliged to collect all information about the loan-taker to make sure that the person can pay back the loan and interests without problems. Earlier, loan-issuers had claimed that the loan takers had to submit correct data about their financial state and the speed-lending company doesn't have to check it.

Another bigger amendment, prepared by the economy and communications ministry concerns changes of the advertising law, as the result of which consumer credit advertising has to be responsible and balanced and cannot attract consumers to take loans without considering it thoroughly first. This means that starting July, the information in the consumer credit advertising about possibilities that the loan enables cannot dominate over the obligations borrowing is accompanied by.

The law comes in force on July 1, 2013.

Very easy access to speed loans has caused a lot of social problems in Estonia. According to the Tallinn Social Work Centre data, an average of 70 persons who have taken a speed loan contact them a month for debt counselling.