A 'cap' is put on excessive interest - The new regulation for loans up to 100,000 euros

In a landmark intervention, Greece is aligning with EU directives by introducing a significant cap on the total repayment for consumer loans. This new regulation, announced by Prime Minister Kyriakos Mitsotakis, effectively ends the long-standing practice where borrowers could end up repaying up to three times the amount they initially borrowed. The upcoming bill, set for public consultation, specifically targets consumer loans up to €100,000 without collateral. Its core provision stipulates that the total debt, regardless of how it accrued, will not surpass 130% to 150% of the original principal. This is a crucial step towards transparency and fairness in lending, putting an end to 'fine print' clauses and predatory practices. From our perspective at Ta Nea, this measure is particularly vital for credit card debt, where exorbitant interest rates often trap borrowers in a cycle of ever-increasing debt. In a time when many rely on credit cards to manage household expenses amidst rising costs, this new 'safety net' is essential to prevent widespread defaults and provide much-needed relief to struggling households. This intervention demonstrates the government's commitment to protecting citizens from financial exploitation and ensuring a more equitable lending environment.