Rules for calculating TCC and cancelling additional paid services change on 21 January
The calculation of the total cost of credit (TCC) now includes all borrowers’ costs, without which a loan will not be issued or will be issued on other terms.
The TCC will incorporate the maximum possible amount of borrowers’ expenses.
For credit cards, banks should disclose the range of the TCC, with the minimum TCC value showing the cashless use of a card and the maximum value showing the cost of cash withdrawals. Both rates will be calculated based on the assumption that the borrower will use the total credit card limit immediately and will make repayments during the effective period of the loan. This will help the borrower understand his/her expenses under the different scenarios of card usage.
When issuing loans, banks will include in the calculation of the TCC all additional payments that have not been previously taken into account (insurance payments, other services sale fees, etc.). These changes will not affect the real cost of the loan, as such costs in the form of hidden fees are already incurred by borrowers. However, now that these costs will be shown in the TCC, individuals will be able to compare and more objectively assess banking services when making their decisions.
Lenders will also have to inform borrowers of services purchased with loans and notify them of the right to reject these services within 30 days (previously 14 days).
Read more about other details deserving your attention when applying for a loan and about the need to amend legislation in the information and analytical material, where you will also find an instruction that will help you better understand the rights of borrowers and the obligations of lenders when issuing loans.