- What are General Loan Terms?
- The distinction between General Loan Terms and Credit Terms
- Components of the General Loan Conditions
- Examination of the General Loan Conditions
What are General Loan Terms?
The General Loan Conditions form the basis for a contract to be concluded between the Lender and the Borrower and fix these cornerstones in a mandatory written form. The addition of the adjective “general” already indicates in the name the universal character of the agreement to be reached.
The distinction between General Loan Terms and Credit Terms
Similar to the General Terms and Conditions relating to the granting of loans, the General Loan Conditions are a standardized text. This means that this is usually applied across providers . Accordingly, it differs from the broader concept of credit conditions. These provide information on the amount of the loan itself but also on all other facets of the individual agreement between the lender and the borrower and are determined for each individual case.
Components of the General Loan Conditions
Two very important examples are the exact term of the loan and the decisive interest rate – these are elementary components of the entire loan agreement, but not of the General Loan Conditions. In turn, their individual points are usually kept the same in all loan agreements.
- the contract period
- the right of termination
- the consequences of late payment
- the possibilities of the remedy or a possible out of court settlement
Next they define:
- the replacement and suspension of installment repayments
- dealing with the Bank
- the aspects of security
- any claims for damages.
Note For the formulation of the General Loan Conditions, EU law in its current version applies.
Examination of the General Loan Conditions
Lenders are anxious that their General Loan Conditions comply with the law, because if the lender misinterprets it, the contract can be challenged at any time. Notwithstanding this, it is recommended that the prospective borrower thoroughly study the terms and conditions of the loan, as well as the terms and conditions, and review the individual formulations. Even if the application for the loan is to be made with great haste, this is absolutely advisable, in order to preclude later problems that can be avoided in advance. Such conditions also apply to lending, such as to service companies based in the European Union.
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