Consumer credit will cost citizens less by July of this year, as the Bank of Albania has decided to lower the ceiling for maximum interest rates that will be applied to these loans.
For all citizens who will turn to microfinance institutions but also banks to obtain consumer loans of up to 200 thousand lek, the maximum interest will be approximately 54.8%, down from 62.2%.
While the maximum interest rate for loans from 200 to 600 thousand lek is 35.4% from 35.2% which was until the end of January. Interest rates for amounts from over 600 thousand lek to 2 million lek are also decreasing, the interest will be 14.7%. While those who receive over 2 million lek to 10 million lek will have the maximum interest rate of 11.94%.
The Bank of Albania also reminds banks and non-banks that they must respect the regulation on penalties in case of non-payment of installments, emphasizing that the amount of penalties cannot exceed 30% of the amount of unpaid installments.
The decision for the Bank of Albania to set the maximum interest rate was taken in 2021 and entered into force in 2022, following the abuses that these non-banking institutions were making with the interests of consumer loans that citizens received, because they provide loans faster and do not require collateral. According to figures from the Bank of Albania in 2022, when the implementation of the regulation began, the maximum interest rate for loans up to 200 thousand lekë reached 171.41%.
The Effective Interest Rate includes all costs that a borrower pays for the loan received (such as the interest rate, various commissions, the cost of maintaining an account if it is mandatory to obtain the loan, the insurance premium paid by the borrower, etc.).
Last year, the Bank of Albania proposed to the Ministry of Economy that a ceiling be set for interest rates on consumer loans in the new law on 'Consumer Protection'.
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