Law Implementation on Loans Imposes Cooling Period Commencing 1st September
New Cooling-off Period Law Introduced for Retail Lending in Russia
A significant change is coming to the retail lending market in Russia, as a new law effective from September 1, 2025, introduces a "cooling-off" period for consumers in financial transactions. This proactive measure, aimed at promoting financial literacy and responsible borrowing practices, has received support from Elmhan Mehtiyev, General Director of the Association for the Development of Financial Literacy.
The "cooling-off" period is designed to provide a pause between a creditor's decision to lend and the actual disbursement of funds. For loans between 50,000 and 200,000 rubles, a wait of at least 4 hours will be required, while loans over 200,000 rubles will necessitate a 48-hour wait. Loans under 50,000 rubles will not be subject to this requirement.
This measure is particularly relevant for online lending and aims to combat "dropper" schemes and other forms of fraud. The implementation of the "cooling-off" period is expected to eliminate the rush often experienced by borrowers due to social engineering schemes used by fraudsters.
Elmhan Mehtiyev believes that the "cooling-off" period can serve as a tool for consumers to assess their financial situation calmly. He suggests that consumers may seek advice from their loved ones during this period. Mehtiyev also notes an increase in offers from illegal lenders and expects these changes to have a significant impact on the retail lending market.
The new legislation aims to protect consumers from the pressure and potential fraud associated with quick financial decisions. A new requirement for creditors is to transfer money only if the borrower's personal data matches the account owner's data.
While current information about Russia's retail lending environment indicates that the Bank of Russia has recently cut the key interest rate to 18% as of July 25, 2025, aiming to balance inflation control and economic growth, this decrease in the key rate does not specify any cooling-off period related to loans.
Cooling-off periods generally aim to protect consumers from hasty borrowing decisions, potentially reducing impulsive default risks and promoting more informed credit use. However, without specific details on the new Russian law, its effects on the retail lending market cannot be assessed. For precise and updated details on this law, it is recommended to consult official Russian legal sources or recent announcements from the Bank of Russia or the Russian Ministry of Finance.
In conclusion, the introduction of the "cooling-off" period is a positive step towards enhancing consumer protection in the retail lending market in Russia. By providing consumers with a chance to reconsider their financial decisions, this new law aims to improve the overall financial health of consumers and combat fraudulent practices.
This "cooling-off" period is not limited to retail lending but can also be beneficial in personal-finance decisions, allowing individuals to assess their financial situation more thoroughly. With the implementation, financial institutions may find a decrease in impulsive lending requests due to the business practice of requiring a pause before disbursement.
