Revolution on the banking market: individual clients who took out consumer or mortgage loans in recent years and are forced by bankers to continue to pay visibly higher interests than those charged for new loans available now will be able to refinance their debt from competitor banks in exchange for an early repayment fee of no more than 1% of the amount left to repay.
Moreover, an early repayment fee will not be charged for variable interest loans, an emergency ordinance passed by the Government yesterday stipulates.
Whereas until now customers had been held 'captive' by loan contracts whereby banks set early repayment fees at their discretion, of 4-5%, the loan market will be able to become competitive in the true meaning of the word, and debtors will have more freedom to choose the best terms on the market.
Banks have three months since the publication of the emergency ordinance in the Official Gazette to amend the existing loan contracts via addendums.
The emergency ordinance implements the stipulations of a European directive on the elimination of barriers on the EU loan market, but also spectacularly extends them through the 1% cap on the early repayment fee for new and old loans alike, regardless of their type, i.e. consumer and mortgage credits.
Bankers had not expected the ordinance to be like this, as it is likely to cause them to lose significant revenues from fees and incur costs for reallocating funds repaid early.
Revolution on the banking market: individual clients who took out consumer or mortgage loans in recent years and are forced by bankers to continue to pay visibly higher interests than those charged for new loans available now will be able to refinance their debt from competitor banks in exchange for an early repayment fee of no more than 1% of the amount left to repay.
Moreover, an early repayment fee wi
