Kazakhstan regulator mandates 14-day cooling-off period for unsecured loans
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Kazakhstan's financial regulator has approved rules requiring banks and microfinance organizations to allow borrowers to cancel unsecured loans within 14 calendar days of signing. The rules also prohibit penalties for cancellation and require lenders to inform clients of this right before contract signing.
Key Facts
- The cooling-off period applies to loans not secured by property collateral, covering banks and microfinance organizations.
- Lenders are prohibited from charging penalties or fines when a borrower cancels within the 14-day window.
- Borrowers who cancel must pay interest only for the actual days they used the money.
- For voluntary insurance sold with the loan, insurers must refund the premium proportionally, deducting only actual expenses.
- Financial organizations must inform clients of the cancellation right before the contract is signed.
Cooling-Off Period Rules
The new rules require banks and microfinance organizations to give borrowers 14 calendar days from contract signing to cancel an unsecured loan. Lenders are barred from imposing any penalties or fines for such cancellation. The borrower must pay only the interest accrued for the actual days the loan was used.
Insurance Refund Provision
For voluntary insurance policies sold alongside the loan, the insurer must refund the premium proportionally to the remaining policy term. The insurer may deduct only actual expenses incurred in issuing the policy.
Pre-Contract Disclosure and Prohibited Practices
Financial organizations must inform clients of the right to cancel the loan or insurance before the contract is signed. The rules also introduce a list of prohibited unfair practices, including hiding essential contract terms, the real cost, and product risks. Creditors are banned from imposing loans or additional services on clients. The changes are set by a resolution of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market.
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Kazakhstan regulator mandates 14-day cooling-off period for unsecured loans
