The agreement between a bank and a person who takes out a personal, vehicle or housing loan is strictly regulated by Law No. 6502 on Consumer Protection and the related regulations. A significant proportion of these rules are mandatory; even if the contract contains a provision to the contrary, that provision does not apply to the detriment of the consumer.

Pre-contractual information

Before the agreement is concluded, the lender must provide the consumer with an information form showing the total cost of the loan, the annual cost rate, the type of interest, the instalment amounts and the early repayment conditions. The agreement is concluded in writing or on a durable medium, and a copy is given to the consumer. Incomplete information may prevent certain fee and interest claims from being asserted.

Fourteen-day right of withdrawal

The consumer may withdraw from a consumer loan agreement within fourteen days without giving any reason. In the event of withdrawal, the consumer pays:

• the principal drawn down,
• the interest accrued from the date on which the loan was drawn down until the date of repayment

within the period laid down in the Law after sending the notice of withdrawal. If payment is not made within this period, the consumer is deemed not to have exercised the right of withdrawal. No additional compensation may be claimed from the consumer on account of the withdrawal.

Early repayment

The consumer may repay all or part of the loan debt before it falls due. In that case, the lender must grant a reduction in the interest and other costs relating to the amount repaid early. In housing finance agreements, early repayment compensation not exceeding the rates laid down in the Law may be charged for fixed-rate loans; for variable-rate loans, no such possibility exists.

Linked credit

Where the loan has been used to acquire specific goods or services within the framework of cooperation between the seller and the lender, it constitutes linked credit. If the goods are not delivered or turn out to be defective, the consumer may, under certain conditions, assert against the lender the rights that they could assert against the seller.

Disputes over fees and charges

In objections to items such as loan file fees, account maintenance fees and similar charges, the consumer may, depending on the value of the dispute, first apply to the consumer arbitration committee. For disputes exceeding the monetary threshold of the arbitration committee, having applied to a mediator before bringing an action is a precondition for bringing the action.

Assessment

The common aim of the rules on consumer loans is to ensure that the consumer sees the cost clearly both when entering into and when exiting the debt relationship. Examining the information form carefully before taking out a loan and noting the withdrawal period in the calendar prevent a considerable proportion of potential disputes from the outset.