About 60 percent of Poles, according to data from the Polish Bank Association, use various credit products. The most popular is cash loans.
Many of us have already dealt with bank lending in our lives, but awareness of the rights and obligations of borrowers is still low in our country. Let’s check how this issue is regulated in the regulations.
Borrower’s rights and obligations
What can and what must the borrower do when taking out various bank loans? What obligations does he have towards the lender during the borrowing and before applying for it and after receiving it?
Many borrowers in Poland have no answers to these questions. It is worth familiarizing yourself thoroughly with your rights and obligations so that when dealing with banks or loan companies nothing surprises us.
Which law derives the rights and obligations of borrowers?
All rights and obligations of the borrower are regulated by the Act of May 11, 2011, on consumer credit. The provisions of this Act refer to consumer credit agreements, i.e. credit agreements in the amount not exceeding USD 255 550 or the equivalent of this amount in a currency other than the Polish currency, which the creditor grants or promises to grant to the consumer in the scope of its activities.
Some provisions of the Civil Code also regulate issues related to the granting of credit obligations.
What rights do the borrower have?
As a consumer taking out a bank loan, the borrower has a number of rights. The rights of the borrower are included in the Act on consumer credit to a large extent as obligations of the lender and credit intermediary towards the customer. Let’s check what rights are at stake.
The right to receive reliable product information
The consumer has the right to obtain reliable information about the product or service from the bidder – the bank or the loan company. Even before the conclusion of the loan or credit agreement, the customer may request a free draft agreement if, in the creditor’s view, he meets the conditions for such obligations.
As part of providing information about the product or service, the consumer should learn about such matters as:
- type of loan or credit,
- contract duration – loan period,
- installment repayment dates,
- commitment interest rate,
- actual annual interest rate (APRC),
- rules for loan or loan repayment,
- possible need to conclude additional insurance contracts and to pay notary costs in connection with the contract.
The right to withdraw from a loan or credit agreement
As a consumer, the borrower has the right to withdraw from the consumer loan agreement without giving a reason within 14 days of its conclusion. In addition, the lender is required to provide the customer with the credit agreement concluded a model statement of withdrawal from it.
If this design is not provided to the customer, he will be able to withdraw from the consumer loan agreement within 14 days from the date of delivery of such design by the bank. The model declaration of withdrawal from the contract may be handed by the lender to the consumer on a durable medium, with the name of the credit intermediary or the lender or the name together with the address of residence or registered office.
The consumer will not bear the costs associated with withdrawing from the consumer loan agreement. The only exception is the need to cover the interest for the period from the date of payment of the loan to the day of its repayment. He must return the loan amount to the creditor, together with interest immediately, but no later than within 30 days from the date of submission of the statement of withdrawal from the contract.
The loan repayment date is the day the consumer transfers the funds to the lender. If the borrower withdraws from the loan agreement correctly and in a timely manner, the creditor will not be entitled to any funds except for non-returnable costs incurred by him for public administration bodies and notary fees.
Right to repay the loan ahead of schedule
Another right of the borrower related to taking out loans and credits is the right to repay all or part of the loan before the date specified in the contract. In addition, according to the Consumer Credit Act, the creditor has no right to make early repayment conditional on whether he will be informed by the consumer about such an intention.
If the entire loan is repaid before the deadline specified in the contract, the total cost of the liability is reduced by the costs for the period by which the duration of the contract was shortened, even if the consumer incurred them before that repayment.
Right to credit information
Every consumer credit advertisement, regardless of where it is posted, should include information on credit costs. The lender is obliged to do so and the borrower has the right to be unambiguous, understandable and visibly informed by him about the interest rate along with the separation of fees taking into account the total cost of the loan, the total amount of the loan and the actual annual interest rate.
In addition, the creditor must explain to the consumer all matters regarding the undertaking. This information must be provided prior to the conclusion of the contract. The bank should also explain the provisions contained in the loan agreement, which will allow the consumer to make an informed decision regarding the conclusion of the agreement.
Who should the borrower contact to consult his rights and obligations?
Unfortunately, not all borrowers are aware of their obligations and rights arising from the conclusion of a loan agreement. In case of difficulties in dealing with the lender, the borrower may seek the assistance of a consumer organization. She may represent him in court, for example.
Advice related to the rights and obligations of borrowers is provided by consumer ombudsmen – private and municipal. You can get free legal advice from them or ask for consultations about your case. The addresses of private and municipal consumer ombudsmen can be found on the website of the Office of Competition and Consumer Protection.
The Federation of Consumers and the Association of Polish Consumers may also be helpful, where free legal assistance is also offered, including for consumers.