The term of consumer loans will be limited to five years in 2022

The term for issuing unsecured loans will be limited to five years, and banks will be required to include in the calculation of the total cost of loans any payments to the lender and offer alternative loan options without purchasing additional services. Such a bill is planned to be adopted in the spring session of parliament, Anatoly Aksakov, one of the authors of the document, head of the State Duma committee on the financial market, told Izvestia. The Ministry of Finance and the Central Bank support the initiative.

The bill was submitted to the State Duma at the end of December by Vice Speaker of the Federation Council Nikolai Zhuravlev and Chairman of the State Duma Committee on the Financial Market Anatoly Aksakov. According to him, the bill has been agreed with all relevant departments and should be adopted in all three readings before the end of the spring session of the State Duma, that is, in the first half of the year. Given that the document provides for a six-month delay for banks to adapt to new requirements, it may come into force towards the end of 2022.

In addition to the above changes, the draft law provides for informing the borrower about the change in the total cost of the loan during the revision of the contract and changing the rules for advertising consumer loans.

Banks and experts interviewed by Izvestia ambiguously evaluate the document. In their opinion, the adoption of the law will increase the transparency of the calculation of the full cost of the loan, but at the same time will lead to an increase in prices for financial services. According to banks, the average term of a consumer loan is now 3.5-4 years, and the maximum possible is 7 years.

Read more in the exclusive Izvestia article:

“Burden and money: the term of consumer loans may be limited to five years already in 2022”