The regulation amending the regulation on consumer loan agreements has been published
The Regulation amending the Regulation respecting consumer loan contracts (“Amending Regulation”) was published in the Official Journal of September 23, 2022 and bears the number 31962. Accordingly, Articles 4, 6, 11, 13, 24, 26 and 32 of the Regulation on consumer loan contracts have been modified.
The most significant changes introduced with the amending regulations are as follows:
The obligation of prior information to the consumer by the lending institution is extended. Accordingly, the institution should provide the following information (i) a sample payment plan prepared based on the contractual interest rate, (ii) sample payment plans for the insured and uninsured loan offerings, ( iii) comparative information on the amount of the installments and the total amount the amount of repayment for offers with equal amount of repayment, (iv) information concerning the name and duration of the insurances linked to the loan and whether they are renewable.
- In addition, in order for these establishments to present a loan agreement that includes consumer loan insurance, the establishment is required to submit the consumer loan preference form along with the pre-contract information form.
- Consumer credit institutions are required to accept the insurance policy taken out with the consumer’s preferred insurance company, which is compatible with the amount and duration of the loan without entailing any modification of the conditions of the proposed loan.
- It has been stipulated that only one insurance can be taken out for the guarantee of the loan and no insurance will be taken beyond the amount of the loan.
- Information regarding the name and duration of the insurances linked to the loan and whether they are renewable has been added to the list of information required in the fixed-term consumer loan contract, in case the consumer accepts and requests it .
- With regard to the open-ended loan agreement, in the event of a reduction in the contractual interest rate, the obligation to make a request within 30 days to apply the reduction in the interest rate for the period concerned has been removed. As with a reduction in the contractual interest rate, this modification can be applied from the last payment date of the period in which the consumer is notified.
- In the event that the entire debt of the loan is prepaid within 14 days, which is the period of the right of withdrawal, the elements other than the accrued interest and the fees paid to public institutions or third parties will be returned to the consumer without the consumer’s notification to the lending institution.
- The amending regulation prohibits the consumer from purchasing ancillary financial products or services, with the exception of insurance linked to the loan stipulated by the lending institution, from choosing the loan offer at the reduced interest rate. Products and services whose fees are counted under the heading Personal Loans in the Annex to the Communiqué on Procedures and Principles Regarding Fees to be Charged to Financial Consumers will be considered financial products and services related to loans.
The articles of the amending regulation concerning the offer of consumer loans with and without insurance and with a comparative payment plan will come into force on January 1, 2023 while the others came into force from October 1, 2022.
You can access the Amendment Regulations in Turkish via this link. (Only available in Turkish)
Information first published in the MA | Gazette, a bimonthly legal newsletter produced by Moroğlu Arseven.