Personal loans: penalties for non-compliance with formalities
Previously, we gave you practical advice on taking out a personal loan. Among other things, we advised you to look carefully at the pre-contractual information provided, and to make sure that certain conditions were included in your agreement.
But what happens if you are not given any pre-contractual information? And what if your agreement omits certain clauses or contains inaccuracies? In such cases, the regulations provide for specific penalties:
- If you do not receive any pre-contractual information, your agreement may be subject to cancellation.
- This also applies if the agreement is not provided in writing or in another durable format.
- If your agreement does not mention the APR, you will only have to pay the statutory interest rate over the agreed term.
- If the agreement does not specify the amount of the loan payments, you will only have to pay the nominal amount, by the agreed dates. If, moreover, the document fails to include these dates, you cannot be required to make the payments until the end of the loan term.
- If the conditions set out in the agreement are imprecise, consequences such as those mentioned above (except for the possibility of cancellation) may be agreed upon, depending on the damage you have suffered.
So, as you can see, the law protects you. However, remember that the courts have the final say in such cases. It is therefore worth checking the agreement carefully before signing it, to avoid problems.
For further information, check our 2020 Complaints Report (in Spanish)