In 2015, more than one million new loans were recorded in Belgium in the Central Credit Register (CCP). Applying for credit for some people can be a difficult step when it comes to a project that is important to you, such as buying a new car or financing a trip. After the approval of your application, you sign a credit agreement, defining the amount loaned and the amount you have to repay. However, it may happen that this loan does not match you finally. What are your rights? tqs-inc.com for an assessment
Borrower is protected as a consumer
Each borrower is protected as a consumer by a number of legal provisions. This protection can allow you to think about other choices, collect additional information, change the length of your repayments and even change your mind completely by giving up your loan.
If you want to apply for credit, you must first find out about the credit you want. For that do not hesitate to use our comparison tool .
Lenders are required at this stage to inform you in a correct and transparent way about the credit you want to contract. It is also important at the same time to provide them with accurate information about your current situation. The banker must indeed know if you have a sufficient income and a stable financial situation. This will allow him to know if you will be able to repay your loan.
Once the credit agreement is signed, the terms are not final. As a customer, you enjoy different rights that we will explain below.
Your right of withdrawal
At the conclusion of the contract, you have a period of 14 days to review your decision; it’s your right of withdrawal. However, this right does not apply to mortgages, which are governed by a specific legal framework.
The possibility of early repayment
In all consumer credit agreements, you have the option to repay all or part of the amount borrowed early (before the end of your contract). Moreover, this can, in principle, be done at any time. However, you must inform the lender 10 days ago by means of a registered letter where you express your wish to proceed with the early repayment.
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With the prepayment the lender may ask you for the payment of a reinstatement indemnity which must not exceed:
- 0.5% of the capital repaid early when the contract is still running for less than a year
- 1% of the capital repaid early when the contract is still running for more than a year
These fees can not be greater than the interest you would still have had to pay if you did not prepay.
For cash facilities, which may also be linked to a credit card with an overdraft facility , there is no charge for prepayment. The only expenses to be expected are the interest charges on the sums used.
Your rights to information during the loan period
The banker is bound by an obligation of information and this throughout the duration of your loan. For example, he must present you with a depreciation schedule. The latter, lets you know what your monthly repayments will be until the maturity of the credit with a breakdown of what you pay between principal and interest. The creditor must inform you not only about the amount you still have to pay, but also the amount you have already paid.
If you have difficulty repaying your loan, it may be wise to temporarily change the amount of your monthly payments. In this case you can seek advice from your banker who will try to find a solution. It may reside in the postponement of a monthly repayment or in the decrease of the amount to be refunded resulting in a modification of the duration of your loan.
Termination of the credit agreement
A credit agreement is concluded for a fixed term. The duration is equal to the agreed number of monthly repayments. However, it is possible to terminate the agreement prematurely when the loan has been repaid early.
As you can see, you enjoy a plurality of rights as a borrower. Nevertheless, you also have homework. Indeed, it is necessary to provide correct information to the banker when applying for credit. If this information changes during the contract, it must be rectified. In addition, you also have a repayment obligation that must be in accordance with the terms of the contract.