Did you find that the loan you took is not as beneficial as your provider or attractive ad originally claimed? You can withdraw from a consumer credit agreement within 14 days of closing. Find out what are the exceptions to this rule and why this is not the case for loans up to CZK 5,000.
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If the objection is justified, the interest rate on the loan will be reduced. The contract will also, retrospectively, from the beginning of its term, be remunerated at the discount rate valid at the time of conclusion of this contract. The discount rate is announced by the Czech National Bank (CNB). Interest with a discount rate is very low. For example, in February 2009 it fell below 1%. Since then, the discount rate has fallen to the current 0.05% per annum.
Examples of mandatory information for consumer credit
- information on the right to early repayment of consumer credit
- annual percentage rate of charge for consumer credit (APR)
- interest rate applicable to late payments
- contact details of the parties
- any fees for maintaining one or more accounts recording payment transactions
- information about the right to receive an account statement at no time
- and more
Loans up to 5 thousand: no withdrawal without penalty
The Consumer Credit Act defines exactly what belongs to this group. But all loans do not meet this definition. If the loan is not a consumer loan at the same time, the consumer has reduced rights, including withdrawal from the contract, free of charge.
What is a consumer credit?
- Loan granted for housing purposes in which the claim is secured by a mortgage and whose purpose is to acquire ownership of the property
- Loan agreed in the form of renting a thing or lease for which the right or obligation to purchase the subject of the contract after a certain period of time (the so-called operating lease) is not agreed
- Loan granted without interest or any remuneration
- Loan negotiated in the form of continuous service or delivery of goods of the same type for which the consumer may pay in the course of their provision by installment
- A loan of less than CZK 5,000 or more than CZK 1,880,000.
§ 2 of Act No. 145/2010 Coll. (Consumer Credit Act) Is it too late to withdraw from the contract? Try to save by consolidation
Loan companies are strongly advocating loans of up to 5,000 crowns because of the looser rules. It does not have to provide the consumer with the amount of mandatory information as consumer credit. In addition, there is no free withdrawal from the credit agreement within 14 days without paying penalties.