Banks will no longer be able to bet pitfalls of borrowing

People who downloaded a mortgage loan, you will receive clear and detailed information about its terms and will be able to compare offers of different banks. All financial institutions will be required to complete a common application form, which in the same way will provide the interest amount and dates of payments, the annual percentage rate, the total amount owed, all fees and interest for a delay with contribution or early repayment.

This bill provides consumer credit, prepared by the Ministry of Economy. It must implement evrodirektiva for consumer loans and enter into force no later than June 2010 Act applies primarily to consumer loans in the amount of BGN 400 to BGN 147 000, but several of its provisions affect both mortgage loans in this size.
Now vaults often provide misleading information and thereby pre-set traps for their clients. In advertising the loan’s annual percentage rate, which includes not only interest, but all charges will no longer be written in small print.
Banks for violation can be fined from 3000 to 8000 EUR For repeated non-compliance penalties to reach 15 000 leva
EU banks would therefore have access to the credit register of the Bank, where will be able to verify the debts of the Bulgarians applying for a loan in another Member State.
Information for consumer loans will be much more than that of the mortgage. People downloaded consumer credit will be able to cancel within 14 days of its conclusion, yet the law provides. To this end they will owe a penalty and only the relevant interest. The loan must be returned no later than 30 days after the client told the bank that waives the contract.
Penalty interest on early repayment of consumer loans are recovered, as requested by the banks, it is clear from the draft. Eksdeputatat Mincho Hristov failed to push through parliament the abolition of the payment in January this year, but banks have reacted very sharply and zakaniha it back. By law the penalty is recovered in part – for consumer loans with fixed interest, because it requires evrodirektivata.
If the interest is variable, however, which is the most common case in Bulgaria, the banks will be able to put the penalty on early repayment.
Currently, people pulled home loans, there is almost no protection and the new law will not change much this situation, commented credit consultants. The reason is the powerful lobby of banks, which for years hindered the adoption of EU-wide rules on mortgage loans. Evrodirektivata for consumer loans is also very modest consumer protection. It enables the vaults to refuse to give the customer even advance copy of the draft credit agreement.

NUMBERS

Bad loans of banks have increased by 159% from July 2008 to July 2009, according to the Bank. Loan growth is even 7.6%. Only problem loans in July grew by EUR 195 million and now stands at 2.5 billion leva, which is 5.09% of total loans distributed, according to calculations Investor.bg. Year earlier, their share was 2.12 percent and the amount – 962 million is the highest share of bad consumer loans – 8.27%, followed by the company – 6.44%, and housing – 5.4%, yet accounts suggest.