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What should a long-term loan agreement contain?

Banking products are increasingly better suited to the needs of consumers. Both banks and loan companies have rightly concluded that this is the best way to attract more customers.

Such flexibility applies not only to the amounts of financial support, but also to repayment dates, which is why installment loans have been created. Thanks to them we will get larger sums, without burdening the household budget too much. Let’s find out more about them and what a long-term loan agreement should contain.

Long-term loan – what is it?

Long-term loan - what is it?

Each of us probably intuitively senses what laws govern this banking product. Since we must pay back payday loans for small amounts within a maximum of two months, it is likely that the repayment of a long-term loan will take at least a year. We can assume that this time limit is correct, though it is not the only one and the right one.

Some institutions already consider loans with a repayment period exceeding 60 days as long-term loans – it is difficult to find the rule in this respect. The rules for granting it are governed by the provisions of the Civil Code (Journal of Laws 1964 No. 16 item 93), and can be given by banks, loan companies, and natural persons. There, you should also look for the answer to the question of what a long-term loan agreement should contain.

Below is a list of companies with long-term loans on good terms. If you decide to apply in one of them, just click “Submit Application”.

Is online long-term loan a consumer loan?

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Many people think that if something is a loan it must be available in the bank. These people should be led out of error because the long-term loan is subject to the Consumer Credit Act (Journal of Laws of 2011 No. 126 item 715). It is difficult to explain how it could be subject to such a regulation without meeting the criteria for this category of financial products. If the customer is a consumer to whom the lender provides financial support for private purposes as part of the business services provided, then we can talk about consumer credit.

Although the long-term loan involves much less formalities and requirements, it is subject to the same ordinances as the products offered by banks or credit unions. A long-term loan agreement can take any form provided that if the loan exceeds PLN 1,000, it will be recorded in writing. Importantly, we do not need to inform the lender about its purpose. We can buy a car, make a renovation, go on holiday with the money we borrow – it’s all in our hands.

What should a long-term loan agreement contain?

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Since we have already mentioned the contract, let’s check how it should be constructed and what the long-term loan contract should contain to make it legal.

In the long-term loan agreement and more, it is obligatory to write the personal details of the borrower (his name, surname, address) and the lender (registered office address). Then, it should contain information on the type of loan granted, its amount (+ interest rate), total costs, as well as the period for which it was granted . It is important to specify the dates and methods of paying the next installments of the loan and describe the consequences that will occur if the customer fails to comply with these points of the contract . He should also be informed about the right to early repayment of the obligation and about the consequences of withdrawing from or terminating the contract. It cannot do without indicating the supervisory authority on consumer protection and without informing the borrower that he has the right to out-of-court settlement of disputes.

A document containing such information is ready for signature by both parties because it has legal force to protect their interests. Let us remember, however, that a long-term loan is a liability that will burden our budget for at least a dozen or so months. Therefore, if we have doubts about the content of the contract, we should consult its content with a financial advisor or even a lawyer. If you have not decided to take out a loan with a guarantor, only you will have to pay debts. So let’s watch what we agree to.