In today’s text you will learn what legal tips you need to watch out for loan agreements. Find out what a contract is and what its necessary elements are.
When deciding to take a loan or credit, we must take into account the need to sign the contract. Each document of this type has at least several pages and contains a lot of information related to the obligation itself, but also to banking law and other regulations. However, most borrowers are not familiar with the content of the contract, trusting the company that provides financial support. It turns out that this is a mistake that can cost a lot!
Probably none of us reads the contracts they sign from cover to cover. This does not apply only to documents presented by banks or non-bank institutions, but also telecommunications companies, electricity and gas suppliers, administration of a residential building, etc. Meanwhile, many loan entities include legal trumpets in contracts that can get the customer in trouble, at least in unfavorable location.
Millions of contracts
Annually, Poles sign several hundred loan or credit agreements. According to the report of the National Debt Register, a commitment has so far been incurred by several million of our compatriots, and many of them have repaid or repays even several different debts. A commitment agreement is a mandatory element of every transaction. As experts argue, a well-structured document is one that is understandable to both parties.
What is a loan?
Pursuant to the provisions of the Civil Code, a loan should be understood as a legal act in which one of the parties undertakes to transfer to the other one an amount of funds or an item marked as to the species. The second one ensures that it will use the goods received in the declared manner or for the purpose specified in the contract. Importantly, the loan can be free, but in most cases companies charge a certain amount in proportion to the value of capital.
The interest makes up the so-called the total costs of the service and are in a way a reward to the financial institution for the risk of granting the loan and ensuring formal issues of the whole operation. The contract is drawn up for each type of liability, i.e. both in installment loans and payday loans. We write more about this in the text entitled 5 main advantages of online loans.
What does the loan agreement look like?
The law does not specify that the contract must be in writing. This rule was adopted because the document then has a higher burden of proof in any court proceedings between the parties. Before proceeding to clarify what legal tips should be considered, let’s focus on the elements that must be included in the contract.
Obligatory is, among others, the date and place of conclusion, defining the parties to the obligatory relationship, i.e. providing their personal data (in the case of natural persons) or NIP (tax identification number), entry in the National Court Register or registered office (in the case of enterprises). It is also necessary to indicate what is the subject of the concluded contract. In a situation where it is cash, specific amounts must be placed in it.