When entering into any commitment you have to reckon with the fact that you will have to pay it back. Non-bank loans due to their high granting and easy access are often abused by borrowers. Any late repayment is connected with the necessity of paying criminal interest, which directly contributes to the accumulation of debt.
Instead of avoiding such a situation and trying the available forms of assistance in repaying the liability, many people count on the statute of limitations for the non-bank loan . What is it about and what conditions must be met to make it happen?
What is time limitation?
By signing the loan agreement , the customer undertakes to repay it on time. Failure to comply with the installment schedule results in the accrual of criminal interest, and then even to the initiation of bailiff proceedings to enforce arrears. There are, however, situations that the repayment deadline expires and the creditor has not requested repayment.
The limitation period for the loan is therefore to evade the necessity to settle the debt, therefore the debtor is not obliged to meet the needs of creditors. However, for this to happen, specific legal conditions must be met.
How do you count the loan’s limitation period?
The lack of timely repayment does not mean that the debt has expired immediately. The limitation period must be observed , which defines after what time the creditor cannot enforce individual debts. This is governed by the provisions of law arising from the Civil Code, which specifies that the limitation period is three years from the date of the last day of the end of the loan period.
These provisions only apply to banks and non-bank institutions. Limitation of a loan from a natural person occurs after a period of six years, which is why everything depends on the type of debt .
Limitation of a bank loan
All financial products offered by the bank, as well as non-bank loans, expire after 3 years. There is, however, a deviation from this rule and this is a mortgage. In this case, the waiver may apply only to interest after the limitation period has been reached. In the case of a mortgage secured by real estate, it may be auctioned when no further installments are paid. The funds obtained in this way are transferred to repay the loan, and the debtor loses all rights to the property.
There are times when creditors demand payment of their debts once the debt has expired. To this end, they attempt to negotiate with the debtor and send letters about the intention to initiate recovery. Many people, fearing the legal consequences, undertake to pay their debts on the basis of a loan agreement that is time-barred.
For this reason, they are obliged to settle additional interest, which accrued over several years may have grown to incredible proportions. In fact, after 3 years, the debtor is not required to pay back the debt. Even if the creditor has brought the case to court or bailiff, such an application will be dismissed because the claims are time-barred .
Consequences of the limitation period for a non-bank loan
Limitation periods are usually considered in the context of benefits for the debtor. He does not have to pay back the debt, which is often high. In this way, he may think he has received a free injection of cash. In fact, the expiration of a non-bank loan has negative consequences that can be severely felt in the future. First of all, it should be remembered that the expired debt still exists in the BIK databases as unpaid.
This adversely affects your credit history and may cause difficulties in obtaining another loan, bank loan or purchase of installment equipment. It is worth remembering that you do not limit yourself to the possibility of using non-bank products when they are most needed.