Cooling-off Period for Unsecured Consumer Credit Products

The Hong Kong Monetary Authority (HKMA) has mandated that retail banks, including digital banks, offer a cooling-off period for all unsecured consumer credit products to promote responsible borrowing. This cooling-off period, lasting at least 7 days after loan drawdown, allows customers to repay the full principal without incurring any fees or charges. Banks must clearly communicate this option to customers during the loan application and approval process. The aim is to reduce impulsive borrowing and ensure that customers have time to reassess their financial commitments. These requirements must be implemented by June 2025, with banks encouraged to adopt similar consumer protection measures. Source: https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2024/20241108e1.pdf