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The Ministry of Economy has taken the step to harden the access to loans “revolving” after the approval of the order of regulation of the revolving credit, and reform legislation of 2004 after its publication Monday in the official state gazette. The new regulations that will regulate the loans through the so-called cards are “revolving” -which runs the risk of falling into a permanent debt. will be focused both to increase the transparency of the face to the consumer as to strengthen the solvency analysis to customers on the part of the entities. However, the adopted measures do not provide set limits on the types, which tend to be much higher than normal, the range of 20% to 30%. Nor is atajará the explosive growth of interests, a mechanism that carries the risk of entering a spiral of perpetual debt difficult to repay on the part of the individual concerned.
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The goal of the new rule is, therefore, to improve the protection of consumers, while reducing the number of lawsuits and is granted certainty, according to point to sources from the Ministry of Economic Affairs and Digital Transformation. “Many cases occur because of the ignorance of individuals and the new measures will minimize the cases. We hope that abuses are marginal in the future”, added the same sources. In addition, from the Ministry of Economy indicate that this standard has now more sense than ever, because “the situations of economic vulnerability” produced by the Covid-19 can do to go to finance with this type of product.
In line with this, banks will have to provide more information both pre-contractual to the client to know who is signing , at the same time that he explains the procedure of graph form by using examples with concrete figures. Also be awarded with additional details once you have signed the loan document “revolving” and during the subsequent months. The financial institution will have to submit information on a quarterly basis so that the user knows first-hand the situation and the amount owed.
in order To strengthen the analysis of solvency and ability to pay, the banks will be able to access the credit history of the customer via the Central Risk Information of the Bank of Spain . At the time of granting the credit, banks will be able to analyze in addition to income, asset ownership, savings, obligations arising from other debts or commitments, their fixed costs and the existence of other possible guarantees. This assessment of creditworthiness shall include, therefore, numerous variables, and will have as its ultimate purpose “to avoid situations of over-indebtedness on numerous occasions lead ultimately to borrowers to not be able to meet their financial obligations”.
in Addition, the standard lowers the threshold of the data provided to entities filing returns in the exercise of its activity up to 1,000 euros, which will be analysed more operations on the part of the Central Risks of the central institution.
Drubbing of the Supreme
last march, the Supreme Court ruled in relation to these fast loans that “can not be justified the fixing of an interest significantly higher than normal money by the risk arising from the high level of non-payments tied to credit operations granted so agile, because the irresponsible lending to the consumer at rates of interest much higher than normal, which makes the over-indebtedness of consumers, may not be object of protection by the legal system”. In this sense, the High Court considered “usurious” interest of more than 27% of the APR that applied to, in particular the bank Wizink.
The “revolving” allows the user to access almost immediately to a financing of money, 6,000 euros for example, to make purchases and to defer its refund in installments, but not to liquidate the debt in one fell swoop. The borrower has two options: choose a fixed monthly fee of return, whose minimum is around 20 euros per month, or choose what percentage of the outstanding balance, you want to return each month.
If the consumer falls in unpaid or paid a small portion that does not cover the total due, the following month you will still owe the bank part of the above more for the current month, which will generate new interests. The system of fixed quota, that is the most used in the “revolving”, it implies that the amount provided and not depreciated produces a few interests that take up most of the monthly bill , so you pay out a very important part of interests and almost non-amortized capital.
If, in addition, is still using the card to finance purchases, the debt continues to grow and at the same time, the interest, which carries the risk of entering a spiral of unsustainable debt.