Parliament committee cracks down on ‘quickie’ high interest loans

The maximum interest on unsecured loans could be set at 20%.

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The Finance Committee in Parliament wants to introduce some new measures to protect consumers who take out ‘quickie’ personal loans from financial companies.

MPs want to cap the amount of interest that can legally be charged on those loans at 20% – the government had made a higher proposal of 30% but the committee voted to make it less.

There’s also a recommendation to tighten supervision of private loan companies, and transfer oversight of their operations to the Financial Supervisory Authority FIN-FSA.

The committee says that credit is too easily given to consumers who can’t cope with high interest repayment rates. They hope a new lower limit of 20% interest rates on unsecured loans might make lending companies do some checks about the person’s ability to pay it back.