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  • Neocleous

New legislation on personal loans

Cyprus has enacted a new law regulating personal loans and limiting the maximum rate of interest which may be charged on them. The interest rate ceiling is calculated using a formula based on half the average bank lending rate of the previous year plus a margin of between 5 and 10 percentage points, which varies according to various risk factors. The current maximum rate under the formula is 17.4%.

Any private loan arrangement between individuals which breaches these conditions will be treated as a criminal offence.