Termination of the loan agreement – When are you in danger?
The only requirement to start such a process is usually a prior written request for payment of arrears. The terms of termination are set out in the loan agreement, regulations applied by the bank.
Loan agreement may be terminated by either party
However, it is rare for the borrower to terminate. Usually, the bank decides to terminate the loan agreement. However, it can only do so under strict conditions. In the event of problems with debt repayment, the bank may reduce the amount of the loan granted or terminate the loan agreement. However, they must comply with the Banking Law, according to which the bank is entitled to terminate the loan agreement if it finds that the loan granting conditions have not been met or if the loan repayment is threatened due to the poor financial status of the borrower.
In practice, this means that the contract is terminated at the time of arrears (usually two installments). Take care of your finances! Rely on the help of professionals.
After terminating the contract
The debtor is obliged to repay the entire debt before the end of the notice period. The existing installments and repayment dates cease to apply. If in the above the debtor does not repay the entire outstanding amount of the loan, it becomes due and interest is charged on delay. These guidelines also apply to new consumer loans, credit or loan agreements concluded from December 18, 2011 in the amount not exceeding USD 255,550 or the equivalent of this amount in a currency other than the Polish currency, which is provided to the consumer by loan companies.
Credit history is the best recommendation
Credit history is information relating to loans, borrowings, revolving limits, credit cards and other credit products. It contains data on liabilities both repaid and newly incurred. Everyone who plans to take out a loan for a house, car or other needs in the future should take care of their positive credit history. Otherwise, you have to reckon with higher interest rates and the need to establish additional collateral. Customers who have no credit history at all are “unknown” to financial institutions. Banks not knowing what to expect from such clients are afraid to take risks.