Credit agreement – what is it and what should you pay attention to?

Therefore, before we decide to sign anything, it is important that we first read the contract carefully and understand it, and in case of doubt, ask for all the points that we do not understand. It is worth getting acquainted with those elements in the loan agreement, which are from our point of view, as the borrower’s most important, and which we must pay attention to.

 

What is a loan agreement?

loan agreement?

A loan agreement is nothing more than a document that is concluded between the borrower and the lender. This document is divided into 2 parts:

  • the first part contains the general conditions of such a contract – the type of loan, interest rate, general rights and obligations of individual parties,
  • the second part describes the individual situation of the borrower.

 

Important points in the loan agreement

Important points in the loan agreement

  • Each credit agreement must include the borrower’s details, such as:
  • his name and surname,
  • Social Security
  • registered address
  • ID number and series.

Therefore, before signing the contract, you must check that our data has been entered correctly and that there are no errors, as this may affect our obtaining a loan from the bank. It is also worth checking the bank account number to which the money will be transferred to us.

  • Another important entry to which you should pay attention is the loan amount and the date when the borrower is to repay it. All these data should be carefully checked, especially as our loan is to be disbursed in tranches to provide all the documents needed to the bank on time.
  • In addition, each credit agreement must include a purpose for which we will transfer the cash received. Contrary to appearances, this is a very important point of any loan agreement, because if we do not allocate the funds received to what we have indicated in the loan agreement, the bank may terminate the agreement with us.
  • The commission is also important. In this case, the higher the sum of our financial liability, the lower the creditor will charge us. It is also worth remembering that although it is a one-time payment, it has a significant impact on the total cost of our loan.
  • And finally, we have an interest rate that depends on the bank’s margin, but often also on the borrower taking additional banking products. The interest rate defines the amount of interest repaid by us and has a noticeable effect on the amount of our installments.

 

Credit advisor – is it worth using his services?

Credit advisor - is it worth using his services?

In case of many questions and doubts, it is worth using the help of specialists, such as credit advisors, who will answer all your questions and indicate those points in the contract that may not be beneficial to us and which are worth changing before signing the loan agreement. Taking a loan is all the more important because it is better to seek the advice of a specialist when we feel that we will not be able to deal with it ourselves than to regret later that we did not do it.

In conclusion, it is worth noting that the financial institution that grants us a loan under the Consumer Credit Act is required to provide us with an information form before signing the contract. The form must include the loan amount, date and method of cash withdrawal, repayment date and amount of APRC, as well as information about the effects that we will feel in the event of non-payment.

In addition, the law imposes on the lender the obligation to provide the borrower with a free draft contract, which must contain his data and the conditions on the basis of which the loan is granted. That is why we have time to calmly review the contract and ask about points incomprehensible to us, so that the loan repayment time (often very long) will pass without problems resulting from our ignorance during the conclusion of such a contract.

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