Lender’s obligations – Consumer Credit Act. | Non-bank loan
Financial choices may sooner or later be incorrect.September 28, 2017 Only one third of Poles give themselves a good or very good grade, analyzing the level of their own financial knowledge. This is the latest data from a survey conducted by the Startie.org educational platform. The results are not optimistic. Especially when we consider our budget. If we are not familiar with the basic concepts, how will we deal with the commitments made? Lack of awareness of the obligations imposed on non-bank institutions will also have its consequences. We will not be able to enforce our own rights. Considering that the value of loans increases by over 2 percent each year and last year amounted to nearly PLN 82 billion (BIK data), our financial choices may sooner or later be incorrect.
Poles’ knowledge about finances
The Consumer Credit Act is a regulator of the activity of loan companies
The Consumer Credit Act, in force since May 12, 2011, regulates the obligations of loan companies. It is good to know these rules when we decide to make a commitment to be able to claim your rights if necessary. An online loan is one of the forms of consumer credit, which is why it is subject to top-down regulations.
Important provisions are also indicated in the Anti-usury Act. On March 11, 2016, new, amended regulations came in, much more favorable to non-bank customers. First of all, the Act draws attention to the limit of costs that the borrower may bear at most. However, a client who is considering supporting his budget with funds obtained from a loan should first of all get to know the obligations of the lenders. Ignorance of the law and general ignorance may be the first step to serious financial problems. The number of loan companies is constantly growing, not all of them are honest, what obligations does the law impose on them?
Clear information on financial obligations
The first and most important responsibility of the lender is to make it clear about the conditions for granting financial obligations. Each loan company is required to provide accurate information regarding:
- commission and interest rate on the loan,
- total loan amount,
- the actual annual interest rate,
- the duration of the contract,
- installments in the case of installment loans,
- entities with which they cooperate.
Details of loans should be on the lender’s website. Comparing several offers, we will be able to see which proposal is better for us. In addition, the lender is required to provide the borrower with an information form containing:
- his data,
- loan amount, date of payment and repayment method,
- costs and conditions when their amount may change,
- consequences of non-repayment on time,
- information on the right to early repayment,
- information about the right to withdraw from the contract.
All this data must also be included in the loan agreement. Therefore, before we sign it, let’s carefully read its next points. If some formulations are of concern or we are not sure what some issues mean, we should contact our lender.
Assessment of the borrower’s creditworthiness
The lender is also obliged to check the financial situation of the borrower. The verification process consists in assessing the consumer’s ability to repay the liability. The loan institution considers:
- information that the applicant has provided in the form sent,
- external databases (e.g. BIK and BIG InfoMonitor),
- own data sets, if the borrower has already used the services of a given company.
The borrower can estimate his chances of a loan by calculating his creditworthiness. This is done using creditworthiness calculators that can be found on finance websites. In order to check the light in which lenders see us, we will have to provide, among others our income, total expenses and the number of people who live in the household.
Formal requirements for running a loan company
Loan companies must also meet formal requirements for their business. These, however, can be found not in the Consumer Credit Act, but in the anti-usury act mentioned earlier. According to its provisions, loans can only be granted by limited companies with fully paid-up share capital. It must amount to a minimum amount of 200,000. zł. In addition, the change of the company’s legal form is associated with the change of simplified accounting to full and double taxation of income.
Verify the lender before you sign the contract
However, it is not enough to know what the lenders have to do with us. To sign a loan agreement that will not have a negative impact on our finances, we should still choose the right lender. The relevant, i.e. credible, non-banking institution, has a KRS number and is not on the list of public warnings issued by the Polish Financial Supervision Authority. In addition, we can look into the Registry of Loan Companies and track the opinions of people who have commented on the forums. People are happy to share their own insights, especially when the lender has not met their expectations. A valuable source of knowledge is also the Central Register of Economic Activity. If we use the CEDG search engine by entering basic company data, e.g. NIP or REGON number, we will obtain a number of information related to it. It will include the date of commencement of its activity as well as the address and details of the proxies.