There is a Thursday evening concluded a broad political agreement on action on payday loans.
As part of the agreement will put an APR-ceiling of 35 percent in order to limit the cost of payday loans.
It informs the ministry of industry.
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minister of trade Simon Kollerup (S) explains in a press release:
– I’m really proud of the fact that we now for the first time really takes a showdown with the payday loans, which have caught many especially the young and vulnerable in unmanageable debt. It was high time. We have made an agreement that protects the Danish consumers. With the agreement we get one of the tightest regulations of the market of consumer loans in the EU.
the Minister elaborates:
– It also means that the companies who behave properly towards their customers, can look forward to a relatively easy transition to the new rules, while a number of those who have been the most greedy, will be required to make their business on. I am glad that there is support in Parliament to the agreement.
in the Past, companies that offer payday loans, able to charge huge interest rates of up to 900 percent. Thus, it is now over.
Targeted actions against payday loans,
: today there will be offered loans with annual cost percentage rate (APR) of more than 800. It’s over now. With the agreement prohibits all consumer loans that have an APR of 35 percent.
With the agreement establishes a marketing ban, which means that companies that offer loans with an APR over 25 per cent., must not promote any consumer credit whatsoever. It is thus prohibited to advertise for the expensive payday loans in buses and trains. Moreover, the introduction of a ban on the marketing of payday loans on the TV in the context of games and gambling.
As a third element put an end to business models where you earn money on reminder fees and other penalty charges. Specifically, the introduction of a omkostningsloft, so one of the maximum paying double the loan in interest, fees and principal repayments, overall.
: It is important that persons who are in financial difficulties, have access to advice. Therefore, there will be released a further eur 5 million. kr. to debt by transferring the Money – and Pensionspanelets tasks to the Danish Fsa. Thus, the total pool of debt up to 60 million. the crowns in the period 2020-2023.
It is important that the confrontation with payday loans, not end up with that form the basis of a private loan market with exorbitant costs. Therefore individuals continue to follow the same rules as those that apply to companies, ift. The APR ceiling, and omkostningsloft. The fsa will carry out spot checks to ensure that the rules are adhered to.
Finally, the teaching of personal finance in the Danish primary and secondary schools be strengthened. Ministry of children and education will, therefore, develop teaching materials and courses for both primary as secondary schools in the private economy.
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