Legal Updates

Legal Updates: Increase of maximal interest for loans

August 9, 2017

The Knesset approved a legislative amendment applying similar obligation to any lender, including institutional lenders (banking corporation, ancillary corporation, a clearing house, etc.) and anyone engaged in operating a credit intermediation system. The law protects non-corporate borrowers but does not protect corporations. The amendment raises the maximum possible interest rate, which may now reach as high as about 20%. The law sets criminal liability in the event of deviation from the interest limit cap and a possibility of imposing monetary sanctions.

The new interest limitation will apply gradually from October 2017.