Article 33 of the Saudi Finance Companies Control Law
المادة 33 من نظام مراقبة شركات التمويل
The article requires a finance company to disclose to its customer, before contracting, the early repayment discount formula, so that it applies when early repayment is agreed or resorted to, and refers its criteria to the regulations.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على شركة التمويل الإفصاح لعميلها قبل التعاقد معه عن معادلة الخصم في السداد المبكر؛ ليعمل بها عند الاتفاق عليه، وعند اللجوء إليه بحكم العقد أو النظام أو القضاء، وتحدد اللائحة معايير معادلة السداد المبكر بما يحقق العدالة بين طرفي العقد.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 33 explained in plain English
This article protects a customer who wants to repay financing before its due date. It contains three provisions:
- Prior disclosure: the finance company must disclose to its customer, before contracting, the early repayment discount formula, meaning the method for calculating the amount deducted if the customer repays early.
- When the formula applies: it is applied in two cases: when early repayment is agreed, and when it is resorted to by virtue of the contract, the Law or a court ruling.
- Fairness: the regulations set the criteria for the early repayment formula so as to achieve fairness between the two parties to the contract.
The practical benefit is that the customer knows from the start how the settlement will be calculated if they decide to repay early, and is not surprised by a calculation method they were never told about. The article gives no figures or discount percentages; it leaves the criteria to the regulations.
The article does not itself establish an absolute right to early repayment in every case; it regulates disclosure of the formula and its application when early repayment is agreed or resorted to by virtue of the contract, the Law or a court ruling.
It is preceded by Article 32 on enforcement employees and followed by Article 34 on the fines the Authority imposes for violations of Article 29.
Before signing a finance contract, or when considering early repayment, you may consult a lawyer specialized in banking and finance.
Practical example
Reem obtained a five-year personal financing from a finance company in Riyadh, and before she signed, the company disclosed to her the early repayment discount formula. Two years later she agreed with the company to repay early, and the same formula she had been told about before contracting was applied to her.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 33 of the Saudi Finance Companies Control Law
Must a finance company tell me how early repayment is calculated?
Yes, it must disclose to its customer, before contracting, the early repayment discount formula.
When does the early repayment formula apply?
When early repayment is agreed, and when it is resorted to by virtue of the contract, the Law or a court ruling.
Who sets the criteria for the early repayment formula?
The regulations set them, so as to achieve fairness between the two parties to the contract.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.