Can a lender grant credit without checking affordability?
They cannot — but do not celebrate too soon. Before concluding the agreement, the lender must assess your ability to repay, on sufficient information about your income, expenses and existing obligations. Credit may be granted only where the assessment indicates you are likely to perform the agreement. And now the myth: where no check was made, the loan does not vanish and the principal still has to be repaid. But the consequences for the lender bite: where their failure caused the wrong lending decision, they can lose the right to charge more than statutory interest, and lose certain default-related claims.
📋 The rules
- Affordability must be assessed before the agreement
- And before any significant increase in the credit
- Credit may be granted only where performance is likely
- Total cost: no more than 0.07% of principal a day
- Default interest: no more than +36 points a year
🔓 Exceptions
- Certain pawn loans, where liability is limited to the pledged item, fall outside parts of the regime
- Specified overdrafts, interest-free arrangements and employer credit may follow different rules
- For a loan repayable within three months, costs may not exceed the amount borrowed
⚠️ Penalties & fines
You have three years to go to court. A consumer may ask the court to reduce the interest and other charges on the ground that the lender failed to carry out the required affordability assessment. And the burden of proof is on the lender, not on you — it is for them to show that the assessment was properly done. Payday loans have a ceiling too. For a single-payment loan of no more than 30 days, the principal may not exceed 50% of the minimum wage, and it may be extended no more than twice. With the 2026 minimum wage of €780, that means €390 — not €370, as older sources still state.
📎 Official sources
- likumi.lv · Consumer Rights Protection Law →
- likumi.lv · Minimum wage regulation →
- PTAC · Consumer credit →
❓ Frequently asked
Does the loan vanish if affordability was not checked?
It does not, and that is a common myth. The principal remains repayable. But the lender may lose the right to charge more than statutory interest and lose certain default-related claims.
What can I do about it?
Within three years you can ask a court to reduce the interest and other charges on the ground that no assessment was carried out. Proving that it was properly done falls to the lender.
What is the payday-loan ceiling?
For a single-payment loan of no more than 30 days, the principal may not exceed 50% of the minimum wage. With the 2026 minimum wage of €780 that ceiling is €390.
How high can the cost of credit be?
The total cost of consumer credit generally may not exceed 0.07% of the principal per day. That is a daily ceiling on total cost, not an annual percentage rate cap.
Is default interest capped?
It is. Contractual default interest is generally invalid to the extent it exceeds the borrowing rate by more than 36 percentage points a year. Anything above that will not hold up.
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