The popularity of fast loans granted via the Internet is growing. The increase in trust in non-bank institutions has had a huge impact on the development of this sector – earlier, borrowing money via the Internet aroused anxiety. Today, most loan companies are controlled by banking supervision institutions that ensure the proper conclusion of loan agreements. However, it is worth knowing what exactly the loan agreement consists of and what elements must be included in it so that it can be considered important. The basic principles of concluding contracts are regulated by the Code of Civil Procedure.
Loan agreement – legal issues
The course of the entire transaction is regulated by Article 724, under which a cash loan is a transaction, the lender (loan company or bank) undertakes to transfer all property rights to the borrower to the borrower. The person collecting the loan is obliged to return the whole or a specified amount of the lender in the contractual period.
One of the main differences between a loan and a loan is the fact that a loan can also be obtained from a natural person, whereas a loan can only be granted by a financial institution called a bank in the contract. Such a loan may be granted for any purpose and the lender is not obliged to charge interest. If there is no record in the content of the contract that interest will be added, or the preparation amount, it is automatically considered that the loan is paid out with a free loan. Each contract concluded for an amount over PLN 500 should be supported by a contract drawn up in two copies in writing.
Money loan – repayment date, collateral
The next stage of the loan agreement is to set the repayment date, in many companies the loan provider himself sets the repayment date and installment amount. In Polish law, it is permissible to introduce a third party to the contract as part of granting a loan guarantee. This person is an additional security in the event that the borrower does not pay the installments on time, then the guarantor is held liable. An additional form of security for large amounts is a promissory note or property pledge.
The lender has the right to refuse to grant a loan or an amount appearing on the loan if there is a blatant probability that the borrower will not be able to repay the debt incurred. Colloquially this is understood as creditworthiness. This legal provision is not subject to termination if the lender knew about the bad property status of the borrower at the time the loan was granted.
Loan – in what currency?
Another aspect that regulates loan law is the currency in which we can lend. Of course, it is possible to repay the debt owed in foreign currency in Polish zlotys. Such an assumption must be regulated by law – the only contraindication is the existence of a record that the lender reserves the repayment only in the currency in which he paid the loan. If, after receiving a loan in a given currency, we decide to pay off the loan in zlotys, the installment will be calculated based on the exchange rate announced by the National Bank of Poland on that day.
Elements necessary in the loan agreement
The provisions of the Code of Civil Procedure regulating the legal issues of concluding loan agreements indicate several elements that must include a properly constructed contract. What must be included in the contract?
- Date and place of the contract.
- Definition of the parties to the contract – the borrower, the creditor
- Indication of the subject / entity of the contract. As the name suggests and as I mentioned earlier, the subject of the loan is money and things that we want to acquire for a certain amount.
- Conditions for withdrawal from the loan agreement. Includes the option of repaying the loan prematurely or withdrawing from the contract within 14 days if the loan amount is fully credited to the creditor’s account.
- Declaration on the financial status of the borrower.