Personal loan approval

Cancellation of loans: how to do it?

What happens if I apply for personal loans and then I regret it?

All users have the right to cancel the contract, always within a few deadlines and with specific conditions

All tye users has the right to cancel personal loans request, in accordance with Law 16/2011, of June 24, on consumer credit agreements.

This law says that “It is the power of the consumer to cancel the contract concluded, thus communicating it to the other contracting party without the need to indicate the reasons and without any penalty.” This regulation allows cancellation of the loan contract requested without any additional cost for it. The credit comparison account the rights and obligations of the client for the withdrawal of the loan.

How the right of withdrawal of personal loans works

The right of withdrawal is the possibility for the user to cancel the personal loan contract without problems. Although there are certain restrictions and rules to do so.

According to article 28 of the Law published in the BOE on June 25, 2011, the term to exercise this right of withdrawal is 14 calendar days from the date of signature of the contract or from the date on which the client receives the contractual conditions.

This is why it is important to notify the entity before those two weeks and it must be delivered in paper or other durable support to the lender. It is advisable to ask the employee to hand in a sealed photocopy of the writing to have a receipt that has received it correctly.

Although the withdrawal will not have any penalty, you have to reimburse it paying the interest generated from the day of the concession and the date of the return, which will be within a maximum period of 30 calendar days from the notification to the entity.

And if you want to return the credits in the middle of the term?

In the case of wanting to return the loan after the 14 day period, the only way to do it will be requesting an early amortization of this. The amortization may be of the total capital of the loan or of a part and may be made at any time during the life of the loan.

In some cases, entities may charge a commission for this service. This cost is not reflected in the APR, since it is not a cost that is passed on to all borrowers. In any case, it must be duly specified in the loan contract.

In article 30 of Law 16/2011 of consumer credit agreements, limits are established for this commission. The cost of repaying a loan early may not exceed 1% of the amount to be reimbursed if the period between the return and the termination of the contract is greater than one year, and may not exceed 0.5% if the term is lower.

In general, early amortization is used in the face of an extra liquidity of the client that allows him to reduce or eliminate the debt in order to save on the interest that would be generated during the remaining period.

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