What is a loan? The legal definition of a loan can be found in the Act of 29 August 1997 Banking Law 1 . Namely, according to art. 69 clause 1 through the loan agreement, the bank undertakes to make available to the borrower for the period of time specified in the agreement the amount of cash intended for a specified purpose, and the borrower undertakes to use it under the conditions specified in the agreement, return the amount of the loan used together with interest on the specified repayment dates and payment of commission on the loan granted.
The loan agreement contains obligations for both parties to the loan agreement. The loan agreement is concluded in writing and specifies:
- Parties to the loan agreement,
- Loan amount and currency,
- The purpose for which the loan is granted,
- Dates and terms of loan repayment,
- The loan interest rate and the conditions for its change,
- Credit insurance method,
- The bank's powers to control loan repayment,
- Conditions for making changes and terminating the contract.
PARTIES TO LOAN AGREEMENT
As the very definition of credit indicates, only the bank or credit unions can give us. The Bank is a legal person established in accordance with the provisions of acts, acting on the basis of permits authorizing to perform banking activities that incur risky funds entrusted under any repayable title 2 . Therefore, the definition of a loan / loan agreement as well as the entities of this agreement are strictly regulated by law. It is the act that determines who can grant us credit and in what form. It is worth knowing that a bank or credit unions grant a loan not from its own money. This means nothing other than the fact that the bank does not own the money it borrows. Money in the bank is really their clients' money entrusted to them in various forms. In the case of SKOK, this is the money of their members. Therefore, the lender is a bank or credit unions. The other party to the contract is the borrower. The borrower can be either a private individual, a company or an institution.
THE PURPOSE FOR WHICH THE LOAN IS GRANTED.
A loan agreement is a special type of agreement that must contain the purpose for which it is granted. For example, buying a flat, buying a car or buying RTV equipment. In the case of this type of loan, I do not receive money "in hand". Moreover, we do not receive this money directly. The money from the loan goes directly to the seller, e.g. flat, car or store selling household goods. Therefore, the money from the loan goes directly from the bank to the product seller, bypassing the borrower. Cash loan is another type of loan. In this case, the money from the loan is paid out in cash or transferred to the borrower's account. The cash loan can also be used for any purpose of the borrower. It is the borrower who decides on what to spend the money from the cash loan.
HOW TO INSURE THE LOAN.
In order to secure loan repayment, banks often oblige their clients to secure the loan. The borrower is charged with the costs of credit insurance. In the case of small amounts, the loan repayment security may be less important. However, for large amounts, loan installment insurance is a very good option. This allows you to insure credits in the event of death, financial difficulties, job loss etc. Thanks to this we can, for example, defer repayment of the loan for a specified period in the contract.