REGULATIONS FOR CONSUMER FINANCING

02 October 2014

The updated consumer finance regulations have been implemented through past Tuesday 16th September for disclosure and transparency purposes which aims to replacing profit margin rate with Annual percentage ratio, which regards the funding provided for beneficiary for individual purposes that are not related to business or professionalism.

The Annual Percentage Ratio (APR) is an international recognized indicator to disclose the actual cost of financing which includes all costs and administrative fees, Thus it’s been based on an equation to facilitate comparison between offers, in addition to that, the declining balance method is applied distributing the term cost proportionally upon installments on the basis of the remaining balance.

Furthermore, the updated consumer finance regulations emphasized on the beneficiary right to accelerate the payment of the remaining amount of funding without incurring the term cost of the remaining contract term, and placed a limit for funders to compensate for the cost of re-investment and expenses that con not be covered.

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