Consumers in the European Union who want to take out a loan have certain rights. These rights protect you at every stage, from signing the contract to repaying the loan. http://www.carofigliotraslochi.com/private-car-loans-for-bad-credit-what-banks-give-car-loans-with-bad-credit/ has examples
We show you all the necessary information about consumer credit law in Austria. You will also find links to further information or to your national consumer offices.
Mortgage loans with a minimum loan amount of USD 200
The Austrian Consumer Credit Act applies in Austria . The information on this website applies to almost all types of consumer and mortgage loans with a minimum loan amount of USD 200 . There is no upper limit. It doesn’t matter whether you are planning to buy a smartphone, washing machine or car or whether you have already signed a loan agreement: it is important to know your rights as a consumer at all times .
Please note that the information provided here deals with the Austrian Consumer Credit Act, which does not apply to the following forms of credit:
- Loans that are repayable within three months and that incur only low costs (short-term loans with low costs),
- where the borrower is only liable for a thing handed over to the lender (pawnshop loans),
- which are concluded between employers and employees as a fringe benefit from the employment relationship at an effective annual interest rate below the market interest rate (loans as employee bonuses),
- which are concluded in the form of a settlement concluded before a court or other state institution or as a result thereof (judicial settlements),
- which are closed by a country, a fund set up by a country or a legal person commissioned by a country in accordance with the statutory provisions on housing subsidies (loans for housing subsidies).
Are you looking for the optimal loan offer for you?
If you want to take out a loan, you should definitely compare different options and providers. Use your right to compare loan offers and ask each credit provider for the most important information in a clear, standardized format, ie as Good Finance Investment for loans under the Consumer Credit Act.
Every credit provider is obliged to provide this information on paper or other durable medium before signing the contract. To request this information from your loan provider and compare different offers before signing a loan agreement.
With the “Good Finance Investment for Consumer Loans” form, you can easily compare the most important aspects of the loan agreement, such as the type and cost of the loan, borrowing rate and annual percentage rate, number, and frequency of installments and important legal questions. You also have the right to receive a copy of the draft loan agreement free of charge.
Did you change your mind or plans?
If you are still not completely convinced of your loan agreement or if you notice that you do not need the loan, remember that you can withdraw from the contract in writing within 14 days of signing it . You don’t even have to give the lender a reason.
Please note that you have to pay back the borrowed money no later than 30 days after the written cancellation. In addition, the loan provider can be compensated for non-repayable fees incurred in the period between the payment and repayment of the loan. Warning, the right of withdrawal does not apply to mortgage loans.
Do you want to repay your loan early?
If your financial situation allows, you can repay your loan before the term specified in the loan agreement has expired. You have the right to repay your consumer credit in full or in part at any time during the contract period . In this case, you are entitled to a reduction in the total loan costs including fees and interest.
Ready to repay your loan early? An early repayment is possible, but in some cases, there are costs (penalties, contractual penalties) for you.
In the case of personal loans, repayment without compensation is always possible if the loan interest rate is variable . With a fixed interest rate, up to USD 10,000 can be redeemed prematurely free of charge within 12 months. In the case of mortgage-backed loans , a notice period of a maximum of 6 months or until the expiry of any fixed interest period can be agreed for early repayment.
If the borrower does not comply with this notice period, the bank may charge compensation for the part of the notice period which has not been met. The amount of compensation is limited by the Consumer Credit Act: 0.5% of the loan amount repaid early if the remaining term of the loan would be less than 1 year. It is 1% in all other cases (i.e. with remaining terms of more than 1 year).
Here is a numerical example: If you repay a fixed-interest loan more than a year before the end of the regular term, this compensation must not exceed 1% of the loan amount, and 0.5% if you repay less than a year earlier.
This means that with an accepted loan amount of USD 15,000, which you repay more than a year earlier, you have to pay a maximum fee of USD 150, and only USD 75, if you extend your contract term by less than shorten twelve months.
In any case, the total compensation may not be higher than the difference between the interest originally stated in the loan agreement and the interest that you have already paid the loan provider.
In summary: If your credit agreement has one of the following conditions, your lender is not entitled to compensation:
- if the early repayment is made with an insurance benefit from an insurance contract that is intended to guarantee the repayment of the loan,
- the amount repaid early does not exceed USD 10,000 within a period of twelve months (for fixed-rate loans),
- the credit has been granted in the form of an overdraft facility, or
- if the repayment falls within a period for which no fixed borrowing rate has been agreed.
There are often notice periods for mortgage loans if you want to repay the loan early. You can either agree a maximum notice period of six months for the residual loan secured by the mortgage, or you can repay the loan up to the end of a period agreed with the lender at a fixed borrowing rate.
If you do not meet the agreed notice period, the lender can demand compensation for the part of the notice period that has not been observed.
If you make the repayment more than a year before the end of the regular term, this compensation may not exceed 1% of the outstanding loan amount, and 0.5% if the remaining term agreed with the lender is less than twelve months.