Virtually all cash loans are at the same time ‘consumer’ and ‘consumer’. These two terms sound similar but have a completely different meaning. The first of these is part of the naming used by national banks. The term ‘consumer credit’ is more formal. It is specified by a law that regulates the functioning of many financial products (including cash loans).
The consumer is under credit protection
The rules for the functioning of consumer loans are set out in the Act of May 12, 2011. Pursuant to this legal act, all credit agreements, which:
- have a value less than or equal to 255 550 dollars
- are offered by an entrepreneur (i.e. a bank, a loan company or a Cooperative
- they finance a purpose directly unrelated to the person’s business and professional activity
It should be noted that the aforementioned limit also applies to loans denominated in a foreign currency. The value is converted at the average exchange rate announced by the National Bank of Poland on the last day of the quarter preceding the date of the loan agreement.
The group of consumer loans includes:
- cash, car, revolving, consolidation and installment loans granted by banks and credit unions
- loans offered by non-bank institutions (so-called loans)
The consumer status of the contract provides special protection for a person who would like to take out a given loan or loan. The entrepreneur must provide it with an information form. After reading such a document, the client should obtain knowledge about:
- creditor and intermediary details
- type of loan
- time of the loan
- of the total value of borrowed capital
- interest rate and conditions for its change
- the level of the Real Annual Credit Rate (the so-called APRC)
- the total amount to be paid
- installment payment rules and deadlines
- additional products (e.g. insurance policy)
- interest rates on overdue liabilities
- the consequences of lack of timely payment
- required forms of security
Consumer credit protection also covers issues such as:
- conclusion of the contract (it must contain the information listed in Article 22 of the Act of May 12, 2011)
- principles of consumer credit advertising (as part of the so-called representative example of advertising such products, they must provide realistic estimates of the cost of credit)
- prohibition of charging the costs of withdrawal from the contract (it does not apply to interest due for the period of capital use and non-returnable administrative and notary fees to be paid by the lender)
- the obligation to provide the consumer with a statement of withdrawal from the contract, which is valid for the next 14 days (the entrepreneur may voluntarily extend the deadline)
- a ban on charging fees for early repayment of consumer credit, which:
- it has a variable interest rate
- over the next 12 months requires repayment of capital less than three times the average monthly salary in the corporate sector from December last year (currently PLN 12,323.85).
Consumer credit provides free spending
As a supplement, it is also worth presenting a brief description of consumer credit. Such a product is used to finance the current needs of the household (e.g. the purchase of home appliances or a holiday trip).
Consumer credit takes both cash and non-cash forms. The first variant is more popular. Thanks to its application, how will the Consumer Ombudsman help you? The consumer can take the funds himself and use them to buy the selected good or service. In the case of a non-cash consumer loan, the bank transfers Capital wished for the account of the entity selling the product (e.g. new car).