New regulation for loans limits bank abuses on clients

The regulation covers consumer and home loans, or other real estate loans. It forces banks to notify borrowers for the exact interest rate, for every commission or other cost they will have to pay.

The regulation gives consumers the right to withdraw from the loan even after they have signed the agreement with the bank, without being forced to give explanations.

For consumer loans, individuals have the right to withdraw 14 days after they have signed. For home mortgages, they have seven days.

If they have withdrawn funds during this time, they are notified abuot the value they must return before the loan is closed.

The new regulation limits the commissions that private banks can charge on borrowers when they don’t pay they pay the debt before the time is due.

So far, banks could place commissions without any legal limit. With the new regulation they cannot force the clients pay more than 2% of the value if they want to pay the loan before the terms agreed in the contract.

Bank of Albania has established a series of regulatory acts to not allow abuses on clients in the banking market.

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