The Law on the Protection of Financial Services Users (“Official Gazette of RS”, No. 19/2025), which will take effect on July 1, 2025, introduces significant changes concerning housing loans and early repayment options.
One of the key provisions allows borrowers to repay up to RSD 1.2 million of the principal annually without incurring any prepayment fees. If the repayment exceeds this amount, the bank is entitled to charge a fee, which may not exceed 1% of the remaining debt—or 0.5% if there are fewer than 12 months left until the loan maturity.
Early loan repayment reduces the total cost of borrowing by lowering the principal amount on which interest is calculated. Borrowers can choose to reduce their monthly installment or shorten the loan repayment period, depending on their financial goals.
The law also clearly states that the prepayment fee cannot exceed the amount of interest the bank would have earned until the end of the original loan term. Consequently, if the bank is able to reinvest the funds under more favorable conditions after early repayment, it is not entitled to charge the prepayment fee.
In addition to these changes, the law retains the rule that monthly loan installments may not exceed 50% of the borrower’s monthly income. It also limits interest rates on housing loans to a maximum of 5%.
Injac Attorneys at law, with longstanding experience and specialization in banking and finance, is a reliable partner for all legal matters related to lending, consumer protection, and financial regulation.
These amendments mark a significant step forward in protecting financial services users and offer greater flexibility in managing long-term credit obligations. If you would like more information or legal support regarding these changes, our team is here to help.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
