Reading laws is not a very popular activity, especially among impatient borrowers. However, each loan company is legally responsible during customer service. No one has observed the sanabanks legally.
The Polish Financial Supervision Authority has bypassed the short-term loans sector for many years, despite a lot of information about bankruptcies caused by usury commitments. Gradually, however, the sanabank market entered the new legal norms. Many provisions refer specifically to the operation of private loan companies. What legal norms should be read before establishing serious cooperation with non-bank institutions?
Laws necessary for the borrower’s security
The Consumer Credit Act is one of the most important legal acts for borrowers. The Act optimizes the information obligations of sanabanks. Thanks to the Consumer Credit Act, every borrower knows exactly how much he will pay for short-term payday loans. This is due to the introduction of the APRC indicator to information obligations.
The Consumer Credit Act also shows the shape of the short-term loan agreement. Knowledge of legal norms enables efficient comparison of information forms, contract templates, interest and non-interest costs, and even to a large extent marketing activities.
The Consumer Credit Act is not everything
The Anti-usury Act on limiting non-interest costs, especially excessive commissions, insurance costs, strange handling and debt collection fees is also gaining importance. Usual commitment, thanks to the anti-usury act, is practically a thing of the past, because non-interest cost limits have been imposed on sanabanks.
Even a low-economic borrower after signing a loan agreement will not be exposed to an aggressive takeover of family property. The anti-usury act also forces loan companies to introduce a minimum share capital of several thousand zlotys. This is practically a guarantee that small, emerging entities counting only on fast, dishonest earnings will simply disappear from the industry and will not threaten the interests of indebted households.
The Anti-usury Act also optimizes information issues very precisely. Now the cash loan agreement assumes properly full cost data, repayment dates, additional formalities, possible debt collection process and many other details. Setting up a sanabank is also a bit more difficult due to capital requirements.
What about comparing cash loans?
Optimization of legal norms and introduction of regulations regarding non-interest costs will limit the profit of many sanabanks, while reducing the pressure on comparing offers. The borrower will simply choose his favorite sanabank and keep in touch with him.
Interest and non-interest costs in minimally variable ranges will force the use of completely new marketing practices necessary to attract a new client payday loans. Fraud on the loan market is a real nightmare for those in debt. Losing property for small payday loans is a life tragedy. After many years of struggles between borrowers and lenders, the industry is being cleaned of dishonest entities. This is extremely good news.
Finally, a secure short-term loan market will guarantee stable income for honest non-bank institutions. How do you assess the legal changes introduced on the short-term loan market?