Any agreement between two parties is sealed by a credit agreement. Credit procedures are no exception. On the contrary, they highlight the major role which links a lender and his debtor.
This file having a legal value, but also a moral value, take the place of consensual agreement. The borrower has the obligation to sign it before to qualify for a loan.
However, reading the credit contract is essential despite its length and letters with very small characters. This step allows you to better understand what you are getting into by signing up for a loan. In fact, all the reimbursement methods are mentioned in the contract, in addition to the total amount, application fees, APR, etc. In the section dedicated to your creditor, you will find his commitments to lend you a capital on such date, repayment deadlines and much more. All details regarding a bank loan are mentioned in the credit agreement.
What does a credit agreement contain?
The plurality of credits on the financial market means that each loan is associated with a specific contract. Whether you take out a consumer loan or a mortgage, you must sign a credit agreement once you have stated its content and you do not see any objection to the terms mentioned. The points that can differentiate a contract are the terms specific to a bank or a financial institution. There is however an established standard for all credit agreements.
A contract must then contain the following points: the type of your credit (consumer or mortgage), your personal information as well as the details of your credit institution. If your contract requires a guarantor, it must also include the information concerning this person.
Then, if it is a mortgage, the titles and information relating to the property must be mentioned in the file. Then, the amount of your loan followed by the mode of use which you have decided for the capital.
The credit contract also details the monthly payments that you will pay in addition to the APR. The monthly payment terms are also written in the contract.
Then, the total sum of the loan with the annual effective annual rate and the costs is also mentioned in the credit agreement. The duration over which you will pay your loan is clearly mentioned in the file. At the end of the credit agreement, you must sign if all that is written is not a problem for you. You are also invited to write “read and approved” at the bottom of your signature.
What are the two types of credit?
There is a varied set of credit, and all of them must be sealed by contract. They are grouped into two major groups, including consumer loans and mortgage loans. In the consumer credit varieties with a loan amounting to more than 75,000 dollars, credit institutions are diversifying their offers. For example, there are installment loans where the borrower is free to use his capital as he pleases. There are also loans intended for works, or loans for the purchase of vehicles (car or motorcycle). The list of credits is therefore very long and each of them is specific to an organization. Besides, if you want to make a comparison use an online loan simulator. With pret-simulateur.be you will get in record time the varieties of loan formulas from Belgian financial organizations.
Another group of loans is mortgage loans. Any loan based on the mortgage of a property can be classified in the mortgage category. In the past, this type of credit consisted only of buying real estate. However, credit institutions have diversified their offerings by allowing individuals to take out mortgages for other purposes. In particular, to finance the purchase of consumer goods or for other real estate. The debtor is free to put under mortgage any property of which he is the owner, on presentation of the title deeds. A loan of this size can also serve as collateral to release funds.
How to benefit from your loan?
To qualify for your consumer loan or mortgage loan, you must sign and approve the credit agreement. You just have to choose the lender with whom you plan to sign. Since the signing of a credit contract involves heavy responsibilities. We can help you choose the best offer suited to your financial means with pret-simulateur.be. It is an online credit simulator that performs comparisons of several loan formulas offered by organizations in Belgium. The procedures are free, without obligation and easy to follow. Using our simulator can even help you take out an online credit application on our site.
Credit contract withdrawal period
After signing the contract, you are free to change your mind if the conditions are not satisfactory. You have a deadline of 14 days for yourself even after the lender and you have signed the contract. However, you have the obligation to send a registered letter to your credit institution in the event of a withdrawal. You must also bear the cancellation costs and return the entire loan.
Financial collection by CCP
The Central Credits to Individuals of the Fine Bank collects all credit contracts two days after their signature. All those who have taken out loans are then listed with the CCP. Contracts in progress are classified in the “positive” section and contracts with problems (unpaid debts, litigation, etc.) in the “negative” section. This system allows people with a risk profile to be filed. It also helps creditors to know all the outstanding loans that you still have to pay. The information communicated by the CCP is also essential in your relations with lending institutions. They guarantee you whether or not you have acquired a loan. Using their system, you will also be able to access this information and make changes if there is an error.