A loan is putting a certain amount of cash at the disposal of the borrower. The loan can be granted only by the bank, all other entities offering us the transfer of cash in use, can give us a loan, not credit.
A loan is a contract or declaration of will of the parties to the contract. Through the loan agreement, the bank makes the money available to the borrower. The loan period, the amount and the purpose for which the funds transferred to the borrower’s disposal will be determined are specified in the loan agreement. By signing a contract, the borrower undertakes to use cash in accordance with the purpose specified in the contract. In addition, the borrower, by signing the contract, also agrees to repay the loan at the dates specified in the agreement with interest and to cover any loan costs, which are also specified in the contract.
HOW A CREDIT AGREEMENT APPEARS
The loan agreement is in writing. This means that it should be in writing and is considered binding and binding at the time of signing.
The loan agreement should specify in particular:
THE CREDIT AGREEMENT PARTIES – a bank loan as the name suggests is a banking operation. A loan can only be granted to us by a bank. Only these two institutions in accordance with Polish law may collect money from other natural persons, legal entities and organizational units. The borrower is the other party to the loan agreement, ie the person who lends money.
AMOUNT OF CREDIT – the loan agreement in its provisions must specify the amount of cash that the bank provides to the borrower.
CREDIT CURRENCY – the loan agreement specifies the currency of cash placed at the disposal. When borrowing money in a foreign currency, for example, 10,000. We still have francs to give back 10,000. francs (plus interest and loan costs). There is no significance for the bank if the exchange rate of the franc drops or increases, we still have to give back the same amount, although after conversion into euros, the loan amount may change.
OBJECTIVE – the loan agreement must specify the purpose for which the loan was granted. It can be, for example, buying an apartment or buying a car.
PRINCIPLES AND REPAIR TERMS – the loan is granted on specific terms that must be specified in the loan agreement. Therefore, the amounts of the loan installments and the repayment schedule must be specified.
AMOUNT OF INTEREST – the interest rate on a bank loan depends on the bank. However, the law regulates the maximum interest rate.
CREDIT PROTECTION – the loan agreement also specifies the method of collateral in the event that the borrower fails to perform the contract and does not repay the loan. Depending on the type of loan, it may be, for example, a mortgage.
BANK CONTROL CHECKS – the loan agreement also specifies the rights that the bank has in terms of controlling the use and repayment of the loan.
TRANSFER OF MEASURES – the time and form of handing over the credited money is also specified.
LOAN COSTS – the loan agreement determines, apart from the loan amount and its interest, the amount of other loan costs, such as money for servicing the loan by the bank or insurance.