Credit agreement - do you know what you sign?

At work, in the shop, in the office and in the bank - every day in each of these places we conclude written or oral agreements, filling in fields, sections or simply paying for specific products or services. However, it is difficult to imagine taking on a commitment such as a cash or mortgage loan without signing a contract guaranteeing the safety of our finances.

Safety guarantor

A contract is, in short, an agreement between two or more parties, setting out both the rights and obligations of each of them. Incorrect performance of the service or failure to meet the obligations within the set time limit may result in early termination of the service. An unspecified document that we will seal with our name may cause us many problems, e.g. oblige us to pay gigantic interest or even prevent us from asserting our rights in court.

When deciding on a cash loan, it is worth choosing a bank that enjoys widespread trust and has clearly defined rules of crediting.

What should the credit agreement contain?

• Details of the lender (possibly the intermediary) and the borrower;
• Duration of the loan;
• Total amount of credit;
• Type of credit and rules for repayment of liabilities (including the instalment settlement cycle);
• The interest rate of the loan, as well as the conditions for its change;
• Information about other costs that the consumer will be obliged to pay, such as: fees, commissions or margins;
• RRSO, i.e. the Real Annual Interest Rate;
• Terms and conditions of termination of the contract by each party;
• Consequences of non-payment on time;
• Interest rate on past due debt;
• Information on the right to early repayment of debts, collaterals and additional agreements.

Lack of any of the above points in the contract should cause the warning lamp in the head to light up.

The credit agreement must be drawn up in duplicate. The creditor shall provide the borrower with a signed document together with all possible annexes specified in the agreement. For your own safety, you should never sign any forms confirming that you have read any regulations, registers or tables, if such forms have not reached our hands.

It is worth knowing that even in the case of a credit agreement, the consumer has the right to withdraw from it within 14 days without giving any reason. Although during this period the bank is not entitled to impose additional penalties resulting from the withdrawal, the consumer has to pay the sum of interest collected from the date of withdrawal until the date of repayment of the credit.