Borrowers who repay credit obligations early are entitled to partial reimbursement of the total costs of the credit

Any borrower who makes early repayment in part or in full of the obligations under a credit agreement is entitled to the reimbursement of part of the total cost of the credit calculated at approval. The creditor must present the reduction in interest and other costs to the borrower free of charge in an understandable way, and must reimburse the difference to the borrower. Should the creditor fail to do so, the borrower may request it within five years of repaying the credit. Banka Slovenije expects banks to be transparent in explaining this right to consumers in appropriate fashion, and is consistently monitoring compliance.

Legislation and the case law of European courts stipulate that borrowers are entitled to a reduction in the total cost of the credit when they make early repayment in part or in full of their obligations under a credit agreement entered into since 7 August 2010. These arrangements do not apply to agreements entered into before that date.

Banka Slovenije reiterates that commercial banks are required to present the reduction in interest and other total costs accruing in the event of the partial or full early repayment of credit to the borrower free of charge and in an understandable way. These encompass all costs that the borrower is required to pay upon the approval of the credit, with the exception of notary costs, certain insurance premiums, costs in connection with entry in the land registry, and certain other costs charged by third parties for services already rendered. If the creditor fails to reimburse part of the costs of the credit in the event of early repayment of its own accord, this may be requested by the borrower within five years of the repayment of the credit.

The amount of reimbursed costs is calculated by subtracting the present (i.e. revalued) value of the contractual interest from the present (i.e. discounted) value of the early credit repayment obligation. These must include any charges that would accrue from the day of early repayment to the day that payment falls due under the credit agreement, when these charges have already been calculated and included in past payments.

For the specific calculation the borrower should contact the commercial bank with whom they entered into the credit agreement.

Banka Slovenije expects commercial banks to present the criteria and methodologies for calculating the reduction in a corresponding part of the costs in the event of early repayment of credit on their websites and in other forms of information for consumers. For new credit agreements this information must be part of the pre-contract information pack that commercial banks send to the consumer to be able to make an informed decision.

Banka Slovenije monitors the actions of commercial banks and savings banks in this area as part of its regular supervisory processes, and takes appropriate action as necessary.

To address any disputes consumers may turn to the Bank Association of Slovenia, and to the court that has sole competence for resolving specific disputes under obligational relationships such as a credit agreement.