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The legal way to pay back loans in Lebanon at only one-eighth of the loan value

2021 could be a year of tremendous savings for those who have pending loans in Lebanon.

By the end of year 2019, specifically after the outbreak of the Lebanese uprising, and with the Central Bank failing to intervene in the market to keep the Lebanese Lira at its official rate, the latter degraded terrifically in the black market where it reached the rate of 9000 Lebanese Lira for only one United States Dollar.

Notwithstanding, the official rate of 1507 Lira for one US dollars remains the same which opens the door for settling one’s debts at a rate of eight times less than their actual value.

Debtors of loans in the US dollars currency, mainly bank loans, are now able to settle the totality of their loans at less than one eighth of their real value; At the beginning, banks accepted such arrangements; however, lately, and after the emergence of the enormous difference between the official rate and the real market rate, banks are objecting to the prepayments of loans.

The standard provisions of contracts between banks and their debtors, the various laws that apply to such matters and the many judgments rendered recently are in favor of the debtors, ruling that the payment at the official rate is legally binding and discharges the debtors of all their duties towards their creditors.

It could be seen as complicated since debtors will need to resort to court in order to force banks to accept their settlement.

However, the effort is worth is since the benefits of paying loans at the official rate are clear – you will save almost seven-eighths of the value of the loan.

Note that legal proceedings are vital if undertaking this process, since by doing so, the debtors guarantee their right to pay at the official rate as soon as they submit their motion in Court, even when the exchange rate changes in the future.

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