Dimitrov Ivanov & Partners - Attorneys at law
News
April 22, 2014New amendments to the Consumer Loan Act
The Bulgarian parliament passed amendments to the Consumer Loan Act (State Gazette, issue 35 of 22 April 2014).
According to the amendments it is now required for all stipulations of the loan agreement to be made with one and the same appearance, format and in font size no smaller than 12 points.
Unilateral amendments to the total cost of the consumer loan are permitted only if the possibility for amendments is stipulated in the loan agreement and the circumstances in which such amendments are possible depend on objective criteria and do not depend on the will of the creditor.
The loan agreement now has to include the methodology for the calculation of the reference rate. Such methodology cannot be unilaterally amended by the creditor after the agreement is signed.
Creditors have to define in the loan agreement the type, amount and purpose of any chargeable fees and/or commissions. Fees and/or commissions cannot be charged for the same purpose more than once. Creditors cannot charge fees and/or commissions for the advancing and the management of the loan.
Among the other significant amendments is the introduction of a ban on the charging of early repayment fees for mortgage loans after the first year of the loan’s term. The ban also applies to loan agreements signed before the coming into force of the amendment of the law.
The amendments of the Consumer Loan Act will come into force on 23.07.2014.
« back
