Romanian Govt Eliminates Early Repayment Fee For Variable-Rate Loans

The government adopted in the Wednesday meeting an emergency ordinance on the issue, according to which banks will have 90 days to sign additional acts to loan contracts to annul the early repayment fee.

The act stipulates the elimination of the fee for all variable-rate loans, mortgage-guaranteed or not, and caps the early repayment fee for fixed-rate loans at 1%.

Back in April, Prime Minister Emil Boc said the Government would endorse the act proposed by the national authority for consumers’ protection ANPC on eliminating the fee for early repayment of bank loans.

This draft is based on an European initiative, but extended the applicability area of the European Commission’s directive on the early reimbursement of bank loans, with eliminating or limiting commissions for all types of loans with variable interest rate.

Bankers should limit to 1% the early repayment fee for unguaranteed consumer loans of between EUR200 and EUR75,000, according to the EU directive.

Currently, each local lender is allowed to set its own fee for different loan categories.