MNB certifies first “consumer-friendly” personal loan

MNB

The National Bank of Hungary (MNB) said on Tuesday it had certified personal loan products from OTP Bank, the country’s largest commercial lender, as “consumer-friendly”, according to a report by state-run news service MTI.

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The lender’s personal loans are the first to be notarized. They will be available to borrowers from January 2021.

The central bank and financial market watchdog said more lenders are expected to submit personal loan products for certification in the near future.

In order to be certified as “consumer-friendly”, personal loans must have terms of no more than seven years and a fixed interest rate for the entire term. The interest margin of the loans may not exceed 15 percentage points for loans up to HUF 500,000 and 10 percentage points for loans over HUF 500,000. The setup fee is capped at 0.75% and the prepayment penalty is capped at 0.5%. Early repayment in the last year of the loan term is free of charge. The loans must be paid out within three working days after the contract has been approved.

MNB introduced certification for “consumer-friendly” home loans in 2017.

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