What is a loan?Uncategorized
Loans are one of the easiest ways to get extra cash. These seemingly innocent financial products can become a cause of gigantic debt. Borrowing and repaying previous liabilities with them is the fastest way to enter the spiral of debts.
What characterizes these products and what makes them so attractive to consumers? First of all, it is worth mentioning at the very beginning that a loan is a completely different financial product than credit.
Who is the borrower?
Loans can be granted by any entity – enterprises, as well as natural persons who do not run a business. Loans are granted by banks and cooperative savings and credit unions. The loan is a banking product and no one but the bank can grant it. So what is a loan and who is the borrower?
It can be a natural or legal person, or even many institutions, such as a bank. In the case of individuals, non-bank companies set the minimum and maximum age for the borrower.
This is because the person who applies for a loan must be at least 18 years old and have a source of income. The borrower’s maximum age is also specified because of the increased risk of such a person’s death. Banks also apply this restriction.
What is the characteristic of the loan?
The loan is concluded on the basis of a loan agreement concluded by both parties, i.e. the lender and the borrower. Its conditions are strictly defined by the provisions of the Civil Code. Pursuant to the regulations, the loan provider is obliged to transfer the ownership of the borrower, and actually taking a specific amount of money.
Thus, the borrower is obliged to return the same amount of money to the borrower. In addition to the written form, the loan agreement may also have an oral form, or even a notarial deed. However, it is important that the contract for an amount over PLN 500 is concluded in writing.
Otherwise it may become invalid
An important element of the loan agreement is its duration. It should contain accurate data – day, month and year in which it was drawn up. This is usually the day the loan was launched. Of course, the end time is also specified, i.e. the day when the money should be returned.
The lender decides about the cost of the loan. What to do if we fail to make payments on time? Are there any solutions that will protect us against the unpleasant consequences of late repayment? Yes, such a solution – very helpful – with problems in repayment is debt restructuring.
It will allow you to adjust the repayment terms to your current financial capabilities. To do this, contact us and we will deal with the restructuring of your debt.