From 1 October 2023, the Consumer Protection Act introduced a new interest rate cap for consumer loans.
According to the Interest Act, the new cap is 15% plus the reference interest rate. For example, if the reference interest rate for the period is 3.75%, the interest rate cap will be 18.75% p.a. (15% + 3.75%).
The reference interest rate is revised every six months to ensure the total loan interest rate charged to the consumer remains under 20% p.a.
As a Bondora customer, you don’t have to do anything on your part. As a responsible lender, we ensure every loan is issued according to the legislation and the valid maximum interest rate limit.
Please note these changes only apply to loans issued from 1 October 2023. So, loans issued before that date follow the existing legislation in force at that time.
For example, consider that from 1 October 2023, the maximum loan interest rate is 18.75% p.a. If a loan was issued on 15 September 2023 with an interest rate of 19.50% p.a., there’s nothing wrong with that rate, as it was below the established interest rate cap of 20% p.a. at the time.
A similar amendment came into effect on 01.09.2019 with a 20% p.a. interest rate cap on loans. This has already been taken into account for our loans granted after that date. It also set an interest rate cap of 50% p.a. as the actual annual interest rate for consumer loans.
Please note: The interest rate cap mentioned above applies to old continuous credit agreements from which new withdrawals can be made. Bondora loans are not flexible loans. For example, a flexible loan issued by a bank or a credit provider is a continuous loan where the consumer can withdraw working capital as needed.