What is the right of withdrawal and what are the deadlines?

Anyone who has completed an online loan and would like to withdraw it between application and payment or immediately after the payment, must pay a lot of attention. There can be various reasons why an online loan should be revoked, for example because the credit needs no longer exist or the borrower has meanwhile found a lower-interest offer.

Correctly revoke an online loan

Correctly revoke an online loan

However, it is of crucial importance that the desired revocation is also carried out correctly, otherwise the credit agreement that has been concluded remains valid. This scenario would be particularly fatal if the borrower did not have an unrestricted special repayment right. But which things are important for credit revocation? How to proceed to properly withdraw an online loan?

What is the right of withdrawal and what are the deadlines?

From a legal perspective, online loans belong to the category of “consumer loans”, so that the borrower has a right of revocation in the context of the financial statements. This is regulated in § 495 of the Civil Code and provides for a statutory withdrawal period of 14 days. The revocation period starts from the day on which the borrower has received his contract copy with all credit-relevant data plus a revocation instruction. The credit-related data must include the amount of the loan, the duration of the contract, the monthly installment and the annual percentage rate of charge. If one of these so-called “compulsory details” is missing or if it is communicated to the borrower only by a further letter and at a later time, the statutory right of revocation is extended to 30 days. For this reason, many banks already offer their customers a 30-day withdrawal period from the outset. Online loans are not part of the consumer loan category unless it is a loan against a deposit or the loan amount is less than € 200 or the contract term is less than three months. If these points can be answered in the negative, the borrower always has a right of revocation with a notice period of 14 or 30 days.

In some cases, a subsequent interest rate adjustment is possible

The most common reason for a credit revocation is the sighting of a better or lower-interest credit offer – this, of course, the banks know. In order to improve the revocation rate, numerous banks offer the option of a subsequent interest rate adjustment in their online loan, which is also offered as a “price guarantee” or “interest guarantee”. Borrowers can make use of this option within a certain period, which usually begins with the loan payment. For example, the “price guarantee” service may mean that the customer’s lending rate is changed or reduced if the borrower receives a lower-interest loan offer from another bank within 30 days. So, even after you have completed an online loan, it may still be worth keeping your eyes open, not just the previous loan comparison. For example, banks offering a “price guarantee” for their online credit are Norisbank (30-day deadline) or Santander Bank (15-day deadline).

So the reverse processing runs at the credit revocation

So the reverse processing runs at the credit revocation

If an online loan is revoked within the prescribed time limit, the repayment process looks like this: Under Section 357 BGB, lenders and borrowers are no longer bound to the original contract – meaning that everything will be back to “start “As if no legally valid contract had ever been concluded. If the loan was still in the application phase, the payment of the loan amount does not materialize accordingly. The borrower can destroy his copy of the loan agreement after he has received a confirmation from the bank and the revocation is completed. However, if the funds have already been disbursed, the repayment plan requires that the entire loan amount be repaid within 30 days. However, the creditor not only pays the loan amount, but also pays interest for the period between payment and repayment. These “Withdrawal Interest” will be charged exactly on a daily basis according to the loan rate. How high the current daily interest rate can be can either be calculated or taken from the loan agreement under the item “Revocation consequences”.

These aspects are important for a smooth revocation

If you are aiming for a smooth revocation, you should definitely pay attention to a few things. First of all, it is important that the revocation letter is received by the respective credit institution within the statutory period or the revocation period granted by the respective bank. The revocation can be sent by letter, fax or e-mail to the respective lender. Recommended is still the variant letter by registered mail, since one thereby as a borrower has the best proof. Regardless of the variant for which you decide, you should always call a few days later at the lender and ask if the revocation has arrived and is accordingly in the processing. The borrower does not have to provide a reason for the credit revocation, it is only necessary that the postmark is from a date which is within the respective revocation period. For example, if you revoke a loan from Bank A in order to take out a new loan from Bank B and have already invested the credit granted by Bank A, you should take care of the further application to Bank B immediately after the revocation. Bank A will be required to pay the loan amount after processing the revocation with 30 days notice and it would of course be fatal if the loan amount were not available on time (Bank B eventually takes some time to process the loan request and payout) need).

What happens in the event of a revocation with the residual credit insurance?

Online loans are often taken out in combination with a residual credit or residual debt insurance. This protects borrowers and lenders against typical “default risks” such as unemployment or disability and is therefore the reason why online loans are offered with interest-subsidized conditions. In the case of a credit revocation, of course, the associated residual credit insurance must be terminated. This should be noted as a borrower in each case in the letter of revocation, since the residual credit insurance is usually not offered directly by the lender, but by an insurance partner. The lender then forwards the revocation or termination of the residual credit insurance to the respective partner. In the past, it came to the termination of residual credit insurance often to legal disputes, as insurance partners did not want to dissolve the contract so easily. The most important aspect here is whether the respective residual credit insurance was also concluded independently of the loan or whether it was a “related business”. In an affiliated business (credit and residual credit insurance were offered to the customer as a “total package”) the revocation according to § 358 paragraph 3 BGB applies not only to the credit but also to the residual credit insurance.

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