Borrowers will be provided with more information

The banks and other non-bank financial institutions, except the savings and loan associations, will be obliged to inform the private individuals who apply for loans about the lending rate when negotiating the loans. They will also have to provide information about all the costs included in the total cost of the loan for the applicant, the total value of the loan, the effective annual interest and, if need be, the length of the loan contract, Info-Prim Neo reports, quoting a bill approved by the Government. The information will be presented at the pre-contract stage, i.e. before the signing of the lending agreement. The bill gives the borrower the right to revocation, which allows terminating the contract within 14 days without explaining the reasons. This provision was borrowed from the European legislation. A number of provisions define the rights and obligations when repaying the loan beforehand. In such a case, the lender will be able to ask for a compensation of 0.5% - 1%. The approval of this bill was awaited by banks and other non-bank financial institutions that provide loans and by the people. More than 300 proposals were submitted during the debates on the bill. Many of them were taken into consideration. In order to ensure the functionality of the law, the Government also approved amendments to the Code of Administrative Offenses, which institute penalties for breaking this law. The fines vary between 1,000 and 6,000 lei.