The Greek government has announced plans to introduce legislation that would cap the total repayment amount on consumer loans of up to €100,000, aiming to curb what Prime Minister Kyriakos Mitsotakis described as abusive lending practices and opaque “fine print” in banking contracts.
Presenting the measure during his weekly review of government work, Mitsotakis said the total amount a borrower would be required to repay—including interest and fees—would be limited to between 30% and 50% above the principal. “This is the average in other European countries,” he wrote in a Facebook post on Sunday, adding that “these are regulations that I believe create a clearer and fairer framework for everyone.”
Scope and Key Provisions
The cap will primarily apply to unsecured consumer loans and credit card debt, categories where high interest rates and complex fee structures have long been a concern. In Greece, interest rates on consumer loans often exceed 10%, while revolving credit products such as credit cards can carry rates above 14%.
Alongside the repayment cap, the proposal includes a 14-day cooling-off period after a loan contract is signed, giving borrowers time to reconsider without penalty. This is intended to improve transparency and strengthen consumer rights in a market that has historically lacked such safeguards.
The move comes as consumer credit in Greece shows signs of recovery after years of contraction during the debt crisis. Demand for such loans has been rising since 2022, but borrowing costs remain high relative to other loan categories, raising fears of over-indebtedness, particularly among vulnerable households.
Broader Banking Reforms
The initiative is part of a wider government effort to address banking practices that burden consumers. In recent years, scrutiny has focused on hidden charges, terms that are difficult for customers to understand, and the high cost of basic services such as transfers and account maintenance. Limited competition in the retail banking sector has also been a persistent issue.
At the same time, the government has pressed banks to raise deposit rates during the period of rising interest rates, accusing them of being slow to pass on benefits to savers. These measures reflect a broader push to rebalance the relationship between financial institutions and consumers in Greece.
The proposed legislation is expected to be debated in the Hellenic Parliament in the coming weeks. If passed, it would bring Greek consumer lending practices more in line with those in other EU member states, where similar caps and cooling-off periods are already common.
