On Sunday the modifications to the consumer credit law come into force. Now Russian banks must calculate the full cost of the loan (FLC) according to the new rules and take into account all the borrower’s expenses.
According to the new rules, when calculating the PSC, banks must take into account any payments from the borrower in favor of the lender or third parties, without which the financial institution will not grant a loan or will grant it, but on other terms.
The total cost will take into account the maximum possible expenses of the borrower.
Additional payments in the form of insurance, commissions for the sale of other services and others must also be included in the PSC. This will not affect the actual cost of the loan, but will allow the bank’s clients to more objectively evaluate the organizations’ offers and compare them with other offers.
If the borrower purchases additional services along with the loan, the lender is obliged to notify this, and also that the client has the right to refuse additional services within 30 days (instead of the previous 14 days).
For credit cards, the bank must disclose the PSC range so that the borrower can estimate his or her own costs in different card usage scenarios. The minimum value will show the cost of the loan when using the card only in non-cash format, the maximum will show the cost when withdrawing cash.
Author:
Akhmed Sadulayev
Source: RB
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