While early repayments on Italian loans have been a relative nonissue in the past, a new law in the works under the Italian Bersani Decree could provide more incentive for borrowers to pay off loans early. The new regulation, if put into effect, would eliminate early repayment charges on loans made after Feb. 2. The decree has 60 days from this date to become law.
According to a report written by Royal Bank of Scotland analysts, the treatment of currently outstanding loans is still under discussion. Terms for these loans may be renegotiated and prepayment fees could shift to a new schedule set by the Italian Banking Association. What those fees will be is still anyone's guess, but the Italian banking association must keep charges at reasonable levels, RBS analysts explained.