El Salvador: Maximum Rates for Loans Announced

As of January 1, 2018, new maximum legal interest rates are in force in application of the law against usury and its reforms.

Thursday, December 14, 2017

From a statement issued by the Central Bank of El Salvador:

The new Maximum Legal Rates (Tasas Máximas Legales or TML in Spanish) will come into effect on January 1, 2018, which correspond to the tenth calculation made since the entry into force of the Law Against Usury, reports the Central Reserve Bank. 
 
Included in this calculation are the second reforms to the Law Against Usury and their respective modifications in the applicable regulations. The amendments to the Law were approved by the Legislative Assembly on August 17, 2016 and are effective as of September 17, 2016.   
 
The Central Bank explained that one of the main reforms establishes that in no case will the legal maximum interest rate exceed three times the current rate of the consumer credit segment for natural persons with a discount order, of up to twelve Minimum Urban Salaries of the Trade and Service Sector (SMUSCS), which may not increase during two consecutive periods. In that sense, the highest effective interest rate that can be charged for a loan in our country, must not exceed 93.27%. 

Read full release (in Spanish).

More on this topic

El Salvador: New Maximum Rates for Loans

June 2017

The Central Reserve Bank has published the ninth calculation of Maximum Legal Interest Rates in Application of the Law against Usury, which will be in effect as of July 1, 2017.

From a statement issued by the Reserve Bank of El Salvador:

El Salvador: Maximum Rates for Loans Announced

January 2016

The Central Bank has published the sixth calculation of maximum interest rates to be used in the enforcement of the law against usury.

From a statement issued by the Central Bank:

The Central Bank, in compliance with Article 8 of the law against usury, published on January 15, 2016 in two national newspapers and on its website, the legal maximum rates that will be in effect during the period February 1 to July 31, 2016.

Entry Into Force of Usury Act

February 2013

The Central Reserve Bank of El Salvador has announced in a statement the entry into force of the usury law on February 24.

A statement from the Central Reserve Bank of El Salvador reads:

The usury law, which aims to "prohibit, prevent and punish usurious practices, in order to protect the rights of ownership and possession of the people", entered into force on 24 February this year, informed the Central Reserve Bank of El Salvador.

Anti-Usury Law Passed in El Salvador

December 2012

Usurious practices by any creditors are sanctioned according to maximum rates set by the Central Reserve Bank.

A statement by the Legislature:

The Legislature approved with 77 votes, in Plenary, the usury law, regulations that prohibit and punish usurious practices by all kinds of creditors, whether individuals, corporations, institutions of the financial system, trading houses, pawnshops, dealers goods and services and pawn shops, among others.

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