Regulatory Alerts2016-04-04 | Circular 13/2007Added · Updated
Circular 13/2007 — Prohibition of Upfront Interest Collection
The document prohibits financial institutions from requiring upfront interest payments on credits, loans, and financing, mandating that interest be charged only for periods that have already elapsed. This prohibition applies to credits with amounts below the equivalent of 900,000 UDIS and to all mortgage credits, regardless of amount. Specific operations are exempted from this rule, including credits to real estate developers for construction, financial leasing, factoring, commercial discounting, and sight letters of credit. Financial entities are required to inform clients of this restriction when agreeing on credit terms, and the provisions enter into force on December 13, 2007.
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