March 26, 2019

Cross-collateral loan: how does it work?

Imagine a scenario where you are ready to sell your car that you now own, freely and clearly, only to be heard by your lender that you cannot sell it until you have repaid another non-guaranteed loan with the same lender. In essence, you are told by the lender that you are not paying for your car and the title is still owned by the lender. This is the result of an obscure clause, called cross-collateralization, used by lenders in certain lending situations. You may not be aware of it unless you have carefully dissected your contract to have it buried deep in the fine print. Even if it was…

March 19, 2019

Mortgage Loans with Variable Rate

When taking out a variable rate mortgage loan or borrowing a loan, it is important to consider some important factors and decide what you want. It should also be noted that there are only short terms, no more than twelve months. If you want to make partial repayments or full repayments and the interest rate level tends to go down, then a decision on the variable interest rate is extremely positive over the fixed rate. Define the interest rate to be calculated with the bank before concluding the mortgage loan. However, there are always different points to consider.   Which type of interest is suitable for whom? The most important…

March 4, 2019

How to set up a loan agreement

The Civil Code regulates in paragraphs 488 and following the legal basis for a loan agreement and its contents. Such a contract is concluded when the lender undertakes to make available to the lender a sum of money of a certain amount. Contracts involving a private loan must be in writing. The written form is also satisfied if the contracting parties declare the request and the acceptance separately in writing. A loan agreement must first comply with the following formal requirements: ► The amount of the loan must be stated as a net amount, ie without the interest to be paid by the borrower and any discount. ► In addition…