The Banking Regulatory and Supervisory Authority (“BRSA”) amended the Regulation on Loan Transactions of Banks and the Regulation on Establishment and Operation Principles of Financial Leasing, Factoring and Financing Companies in order to amend the maximum term of consumer loans and provide a restructuring opportunity for this type of loan. The amendments were published in the Official Gazette dated August 15, 2018 and numbered 30510 and will enter into force on September 1, 2018.
- The maximum term for consumer loans was 48 months. The new maximum term will be 36 months, except for (i) loans for house purchasing and renovation or financial leases related to housing; (ii) other real estate loans; (iii) loans for financing education and training fees; and (iv) loans for financing debts owed to public authorities and institutions, on the condition that the payment is directly made to the authorities or institutions’ account, as well and loans for the refinancing of the aforementioned debts.
- Consumer loan terms for vehicle purchases and vehicle-secured consumer loans cannot exceed 48 months. Consumer loan terms for mobile phones, tablet and computer purchases cannot exceed six months. The same time limits will be applicable for the restructuring of the aforementioned loans.
- Pursuant to the transitional provisions of both regulations, if the borrower requests the restructuring of an existing consumer loan within one year as of September 1, 2018, the loan term will not exceed 48 months. If the borrower is provided with additional loans within the scope of a loan restructuring, the new loan term cannot exceed 36 months.
Pursuant to these amendments, except for certain consumer loans, consumer loan terms cannot exceed 36 months.