Precontractual information

Reminder for borrowers and additional information for applicants for loans secured with residential property

Bear in mind that taking a loan is a big decision that involves risks. We want, and consider it our obligation, to help you in making that decision.

By the time you submit your application you should have thought about and answered the following questions:

  • make it clear to yourself how big a loan you need, what you need it for, where you will get the money from to repay it and what costs are associated with taking out the loan;
  • present the Bank with true and sufficient information about your income, your expenditure and your goal in taking the loan;
  • take into account that if your financial situation worsens, which it may do, you will still be required to repay your loan;
  • before signing anything, read through all of the loan documents (agreement, information sheet, etc.) carefully, without rushing; and
  • if you have trouble repaying your loan, contact the Bank so that we can work together to try and find a solution.

Make the most of the opportunity to ask the Bank for information and explanations regarding the terms and conditions of the loan both before you enter into your agreement and during the term of the agreement. The contact details of the Bank can be found in the loan documents or on the Bank’s website at Review the terms and conditions of the financial service, consulting a specialist where necessary. Please make sure that you are aware of the fees and costs accompanying your loan.

When reviewing the terms and conditions of the loan, pay attention to the following.

1. Standard European Consumer Credit Information Sheet

Pre-contractual information is compiled for consumers wishing to purchase, build or renovate a home. Before entering into a loan agreement the Bank’s representative will provide you with a copy of the Standard European Consumer Credit Information Sheet, which contains a summary of the key terms and conditions of the loan. Please read the information on the sheet carefully.

2. Type and purpose of loan

The Bank only issues home loans and mortgage loans to consumers whose permanent place of residence upon entering into the loan agreement is in a Member State of the European Union whose currency is the euro. The loan is designed for the purchase, construction or renovation of a home.

3. Terms and conditions of loan agreement

The Bank offers loans with a maximum repayment term of 30 years. The duration of a loan agreement depends on the results of the assessment of the creditworthiness of the borrower. The Bank follows the principles of responsible lending, to which end it collects information for the assessment of the borrower’s creditworthiness prior to entering into a loan agreement. If you do not submit the required information or evidence and the Bank is therefore unable to assess your creditworthiness, the Bank is unable to enter into a loan agreement with you.

If you take a loan jointly, both borrowers are liable for the fulfilment of the agreement: each borrower is responsible in full for the repayment of the loan and the fulfilment of the other obligations assumed in taking out the loan.

4. Obligation to open an account in which your income is received

You must have opened a current account in Citadele Bank by the day on which you sign your loan agreement at the latest. This account must remain open for the duration of the term of the loan. Your regular income must be received in your current account in Citadele Bank.

5. Interest rate

Interest is the fee you pay for the use of a loan. The interest rate is set out in the agreement. Type of interest rate applied: floating, i.e. 6 months’ Euribor + the margin offered by the Bank. Euribor may change every six months (see 

6. Amendment of terms and conditions of loan agreement

The terms and conditions (including the interest rate) of an agreement are generally only amended with the consent of both parties. Any such amendments are formalised as an annex to the agreement. However, in certain cases the Bank has the right to unilaterally raise the interest rate: by 4% if the borrower breaches their obligation not to assume debt obligations, incl. from a third party or parties in order to raise the amount of self-financing required for the purchase of the loan asset (home/residential property); by 1% if the borrower breaches the obligation set out in the agreement to have their salary and/or other sources of income equivalent to a salary transferred to their current account opened in the Bank; or by 1% if the borrower has been in debt to the Bank in the repayment of their loan for at least 14 (fourteen) days.

7. Collateral

A loan is secured with a mortgage. The collateral accepted by the Bank is an immovable, apartment ownership or right of superficies located and registered in the Republic of Estonia. When submitting their application the borrower must also submit a valuation report for the selected collateral. The valuation report must have been compiled by a professional appraiser (Level 6 or 7) from a real estate office acceptable to the Bank. We would like to draw your attention to the fact that the valuation of real estate is a fee-charging service. Before a loan can be issued an insurance agreement must be entered into for the collateral. The amount of the insurance premium depends on the residence selected and the insurer.

8. Loan repayment

Your repayments must be made each month according to a schedule. The repayments include the basic amount of the loan plus interest. As a rule, each repayment is the same, meaning you pay the same amount each month (annuity payments).

A loan can be repaid in full or in part ahead of schedule. The contractual fee for early repayment of a loan is equal to three months’ interest calculated on the basis of the interest rate valid on the day of repayment of the amount being repaid. Example: monthly repayment of 100 euros, of which interest comprises 40 euros > contractual fee for early repayment of loan = 120 euros. The contractual fee is not applied if you inform the Bank at least three months in advance of your intention to repay your loan ahead of schedule.

9. Typical example of loan

Loan amount 70,000 euros, duration of loan 30 years, number of repayments 360, floating interest rate 2,0% (margin + 6 months’ Euribor), total cost of credit 97,254.10 euros, total amount of payments made to cover loan amount and total cost of credit 93,654.10 euros, insurance premium 10 euros, amount of payment for each period 259 euros, annual percentage rate 2.05%. Notary fees are not taken into account when calculating the annual percentage rate as they depend on the selected asset and the terms and conditions of the purchase and sale transaction. For further information see

10. Withdrawal from agreement

Consumers have the right to withdraw from a loan agreement within seven (7) calendar days of entering into the loan agreement in question. To do this, a signed application must be submitted to the Bank on paper or electronically. If the Bank issues the loan to you in part or in full before this deadline, both the loan and any interest must be repaid to the Bank within 30 (thirty) days of the date of submitting your application to withdraw from the agreement.

11. Failure to fulfil obligations connected to loan

If you have trouble making your repayments, contact the Bank immediately in order to find out what solutions are available. If you are late in making your repayments you will be charged a penalty and issued with a notice of debt. Every obligation that becomes collectible is subject to a collection fee of 5 euros. The lender also has the right to demand that the borrower pay a contractual penalty of 28.76 euros each time they delay in fulfilling any financial obligation for more than four (4) calendar days.

12. Termination of agreement

The Bank has the right to extraordinarily terminate a loan agreement in cases (among others) where you delay, in part or in full, in making at least three consecutive repayments. All costs arising from the collection of the debt shall be borne by you. Terminating your agreement may result in the transfer of your collateral i.e. your residence.

The Bank may also terminate the agreement if it was unable to properly assess your creditworthiness because you chose not to submit certain information or submitted falsified information and the Bank assessed your creditworthiness incorrectly as a result.

13. Risk of reduction in borrower’s solvency

Think carefully about how you will cope with your repayments should the overall economic environment decline, your salary decrease and/or other costs increase. If you have trouble making your repayments, lose your job unexpectedly, are subjected to enforcement proceedings or your bank account is frozen, contact us immediately. We can work together to find the best solution. Such solutions include changing the date of your repayments and applying a grace period. A grace period is when we postpone your repayments of the main part of the loan for a certain period and therefore extend the end date of your loan.

14. Complaints and disputes

If you have any complaints about our operations, we can try to resolve them by way of negotiations. The procedure for the resolution of complaints can be found on the Bank’s website.

If, despite the negotiations that are held, the Bank's response does not satisfy you, you can seek advice from the Consumer Protection Board (Pronksi 12, 10117 Tallinn; or the Financial Supervision Authority (Sakala 4, 15030 Tallinn;

A Consumer Disputes Committee has been established within the Consumer Protection Board for the resolution of disputes. You can also submit a complaint to this committee via the dispute resolution site