European Union lawmakers have been debating how consumers in the bloc can get cheaper personal loans, a market worth some 800 billion euros per year. The rules cover personal borrowing of up to 75,000 euros.
The package will be put to a vote this Wednesday.
Early repayment of loans has been the biggest sticking point. The head of the European consumer defense bureau BEUC, Monique Goyens, gives her opinion:
“Everyone agrees – all the institutions, the Commission, the Parliament, the Council – that the consumer has the right to pay off the remaining part of their loan earlier than arranged. It’s the principle that he who pays off his debts gets rich. And consumers should have that freedom.”
Under the measures, people would have a right to to repay a loan early or withdraw from a loan agreement within 14 days — a new feature in many EU states.
Consumers would have to be given standardised information about loans so they could compare offers easily. Only one percent of consumer loans are cross-border transactions, and the idea is that more competition in the sector should push down interest rates on loans, which vary from 6 percent in Finland to 12 percent in Portugal.