Consumer credit is a special type of loan that has been fully regulated, granting it rights, rights and obligations of the parties to the loan agreement or repayment rules. The Consumer Credit Act gives many rights to the borrower. What?
The right to obtain credit terms and repayment schedule, withdraw from the loan agreement and terminate it – these are the basic benefits that the Consumer Credit Act gives to borrowers.
What is consumer credit?
Pursuant to the provisions of the Act, a consumer credit agreement is a credit agreement in the amount not exceeding USD 255 550 or the equivalent of this amount in a currency other than the currency, which the lender grants or promises to grant consumer credit to the consumer in the scope of its business activity. At the same time, a consumer loan agreement can also be any loan agreement not secured by a mortgage, which is intended for the renovation of a house or apartment in the amount of more than USD 255,000.
The consumer loan agreement will include:
- credit agreement, concluded on the basis of the provisions of the Banking Act,
- loan agreement,
- revolving loan agreement, etc.
For example, if a loan is granted free of charge, without accruing interest or other charges, it will not be legally considered a consumer loan.
The borrower’s basic rights
The conclusion of a loan agreement, which in law will be considered as a consumer loan agreement, means that the borrower receives numerous benefits. Already at the initial stage of applying for such a commitment, he has the right to receive a free draft contract at his request, which will take into account all the conditions for its granting. After granting the loan, the customer who has entered into a fixed-term loan agreement has the right at his request to receive the repayment schedule of principal and interest installments at any time.
A very important benefit for a customer taking out a consumer loan is that he can terminate the revolving credit agreement at any time, without additional charges, and the parties may specify a notice period of not more than a month in the agreement.
In addition, the consumer has the right under the existing provisions to withdraw from the consumer credit agreement without giving a reason within 14 days of the date of the contract. This period begins on the day of conclusion of the credit agreement or on the day on which the consumer receives the terms of the agreement and information on the right to withdraw or not.