In the area of lending, particularly for car loans, the law has established a right of return, well defined in time and measure, called the “withdrawal period”. This period concerns all reckless credit subscription acts, on the part of the borrower or the credit organization by the “acceptance clause” of the person of the borrower.
By putting his signature on a credit contract, the application of its clauses seems final. But the credit legislation gives the borrower a very useful withdrawal tool to reverse his commitment, in the event of an early subscription. Likewise, the organizations of banks where credit can exercise this right, in the event of the appearance of a formal defect or others.
The borrower’s withdrawal
The law provided the borrower with 7 full days from the date appearing in the signature of the credit agreement to exercise the right of withdrawal.
For example, the loan offer is granted on Thursday, the right of withdrawal is enforceable until the following Thursday at midnight exactly. Note that, if the deadline has expired on a Saturday, Sunday or a public holiday, it is automatically extended until the next working day.
In the event that the loan contract is not completed by the specific withdrawal form, the borrower can also withdraw by sending a registered letter with acknowledgment of receipt to the credit institution concerned. He must again respect the legally defined deadlines.
In the event of immediate delivery of a vehicle acquired by means of a loan, the withdrawal period is limited to 3 days in exceptional cases.
The advice to obtain a Cheap Auto Credit: do not hesitate to extend the delivery date of your vehicle, in order to keep a withdrawal period of one full week. A credit commits you and should not be taken lightly!
The withdrawal from the credit organization side
Usually, credit agencies provide an “acceptance clause” of the advance offer, which is the full right to approve the borrower. This is automatically implemented in the following cases:
- if the establishment formally agrees to grant credit to an individual;
- if the borrower does not exercise a return on his commitment during the period provided by law.
Withdrawal and release of funds
At this level, the right of withdrawal is exercised if:
- the transaction is not concluded in final quality, therefore the borrower cannot receive any payment from the credit organization, with the exception of an affected credit case.
- the credit institution has transferred the funds before the end of the withdrawal period. In this case, the bank or the lending institution does not have the right to claim the restitution of the amount paid to the borrower who has exercised his right to reverse his commitment, without the possibility of receiving interest.
The law also provides for other withdrawal periods, concerning mortgage (14 days) and other credits. Do not hesitate to consult the other categories of Cheap Credit for more information.