As soon as you have signed the loan agreement with the bank, it is valid. A legally binding and binding loan agreement is concluded with the consent of both parties – ie you and the bank – in the form of the respective signature. If both parties agree to the loan, the loan contract is valid.
This is how a loan contract comes about
If you need an installment loan, you usually apply to a bank. Depending on what you need the loan for, you may be offered a special car loan or modernization loan, for example. Such dedicated loans have a countervalue. In this case, either a car or the increased value of a property through the modernization. Dedicated loans often have a lower interest rate than a free loan due to their equivalent value.
You receive an installment loan if you either go directly to the bank or if you apply for it through a credit broker. Credit intermediaries have the advantage that they can often compare many providers with one another without effort. This gives you, the applicant, a more comprehensive overview of the market situation. In order to apply for a loan, the credit intermediary needs proof of your income and other liabilities in addition to your identity card. So it is checked in advance which options you have financially.
If you opt for a bank offer, a credit check is carried out. If this is positive, you will receive the bank’s specific and individual loan contract. In this you will find information about yourself, such as your name, address and account details, the exact amount of the loan, the interest, the amount of the monthly installment and the term and amount of the remaining debt. Details on notice periods, special repayments or any integrated residual debt insurance are also listed here, as are the data protection and cancellation conditions. If you agree to the terms and all the information is correct, put your signature under the loan agreement and it is valid. After the signed contract has been received by the bank, the money will be transferred to you.
If, contrary to expectations, you change your mind and something unexpectedly comes up financially, you have 14 days by law (section 355 (2) of the Civil Code) to revoke the loan contract. To do this, you have to revoke the credit agreement informally, but in writing, at the bank. You do not have to give a reason, but you do have to provide the credit number and the date of completion. The cancellation period begins on the day on which you receive the cancellation terms. So usually when you get the loan contract.
If you have not yet received any money from the bank, you do not need to do anything after the cancellation confirmation. If you have already received money, you must transfer it back within the period specified by the bank. In addition, you will most likely have to pay the interest accrued between the time of payment and the withdrawal.