There are many reasons why we decide to withdraw from the loan agreement. Read the article and learn about the procedure for departing from the legal side.
When do we want to withdraw from the loan agreement?
We can distinguish two situations in which we decide to withdraw from such a contract: when we have found a better loan offer or if we do not need the money. Let’s take a closer look.
Sometimes the need to get money in a short time forces us to take out a loan. The reason may be a car defect, broken fridge or other unforeseen circumstance. We tried to borrow money from loved ones, but after several refusals, we decided to take a loan. The unique situation and the vision of getting money very quickly meant that we did not look particularly at the terms of the contract. And what if the money from the bank or loan company has already hit our account, and we realized that there is a company that could lend us money on better terms? This is the first situation in which we usually decide to withdraw from the loan agreement.
It may also happen that we took out a loan, and after a few days from signing the contract, it turns out that we do not need money at all. We can win a large sum of money (which we all wish), or a distant relative can say, offering us money – there are many possibilities. In such situations, it is not worth continuing the loan agreement, and the wisest decision is to withdraw from it.
What does the act say?
Polish law, and more specifically the Consumer Credit Act, clearly specifies that the borrower has the right to withdraw from it within 14 days of concluding the contract. This applies to any situation in which a natural person borrows money for purposes not related to running his own business from a company / institution that grants such loans in order to make a profit. The Act applies to loans granted not only by banks, but also credit unions and loan companies providing quick payday loans – we have already written about the termination of payday loans in the article Termination of payday loan agreement.
It is also worth emphasizing the fact that despite the fact that sometimes we need to indicate the purpose of the loan, so in the event of withdrawal from it we do not have to explain the reasons for our decision. The lender simply has no right to ask us that.
To withdraw from the loan agreement, a written application must be submitted with the borrower’s hand signature. A template of such a document should be obtained along with the loan agreement. Receiving such a print, which should include the lender’s address and company name, not only informs us of our right, but also facilitates the withdrawal process if we decide to do so.
There are two options for submitting an application for withdrawal. If we have the opportunity, let’s put it in the headquarters of the company that lent us the money. Not only to have confirmation of the submission of such an application, let’s ask for a copy with the signature and stamp of the institution’s employee. In this way, we will protect ourselves from any disputes regarding the deadline for submitting the document.
We can also send the completed application by post, but it is very important to do it with a return receipt. Only then can we be sure that the document has reached the loan company and was picked up by its employee. If the application is sent by post, the date of withdrawal from the contract is not the date of receipt of the document by the loan company, but the date as postmarked.
Return of borrowed money
We have the right to withdraw from the loan agreement within 14 days of its conclusion, but we are also obliged to return the money borrowed to us on time. This period is indicated in the contract and is usually 30 days. The sooner we do it, the better, because until cash returns we are charged interest for the ability to dispose of borrowed money. So that there is no doubt about the amount to be paid, it is best to go to the lender’s headquarters. After receiving information about the exact amount to be refunded and after settling this amount, please ask for a receipt stating that we have settled the entire debt.
It is also worth remembering that if we do not return the required amount within 30 days, the submitted request for withdrawal will be considered invalid, and the provisions of the previously signed loan agreement will apply to us.
Recovery of additional fees
Not only do we have to settle accounts with the lender, but the lending company should also pay back the money owed to us if we want to withdraw from the contract. The deadline is 14 days from the date of withdrawal. The lender is obliged to return the commission and other fees related to the loan, including credit insurance, less the number of days in which we had the opportunity to have the money borrowed.
An exception to this rule are notary fees or the establishment of security. At this point it is worth mentioning that Fagin does not require any borrowers or guarantees from borrowers.
Termination, termination, withdrawal from the contract
We often confuse each other with the concepts of termination, termination and withdrawal. We will try to explain each of them briefly.
Termination of the contract is based on the agreement of two parties to the contract, which determine the procedure and possible consequences of termination.
Termination of the contract is a statement of only one of the parties to the contract and the effects of termination relate to the future.
Withdrawal from the contract refers to events from the past and results in a return to the status quo prior to signing the contract, i.e. withdraws its effects.
As borrowers, we should be aware of the possibilities offered by Polish law. In any case, when we are not satisfied with the terms of the loan and would like to borrow money from another company (assuming that 14 days have not passed since signing the contract), we should not hesitate to withdraw from such a contract.