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MNB certifies first ʼconsumer-friendlyʼ personal loans

The National Bank of Hungary (MNB) on Tuesday said it certified personal loan products of OTP Bank, the countryʼs biggest commercial lender, "consumer-friendly", according to a report by state news wire MTI.

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The lenderʼs personal loans are the first to be certified. They will be available to borrowers from January 2021.

The central bank and financial market watchdog said more lenders are expected to submit personal loan products for certification in the near future.

To be certified "consumer-friendly", personal loans must have terms no longer than seven years and have a fixed rate for the full term. Interest spreads on the loans must not exceed 15 percentage points for credit up to HUF 500,000 and 10 percentage points for credit over HUF 500,000. The origination fee is capped at 0.75% and the early repayment penalty at 0.5%. Early repayment in the last year of the loanʼs run is penalty-free. The loans must be disbursed within three working days of contract approval.

MNB introduced certification for "consumer-friendly" home loans in 2017.