Consumer loan is a loan with an installment refund for the purchase of goods and or services.
Granted in the form of a personal loan, assignment of one-fifth of the salary or revolving loan.
This type of loan, governed by Law 142/1992, provides for an amount ranging between 154.94 and 30.987.41 euros.
It can be granted by banks, agencies registered in the UIC and by traders (exclusively in the form of deferment of payment of goods or services).
It is possible to sign the contract with the financing institution or in the reference point of sale. The contractor is required to provide proof of identity, tax code and documentation certifying his income. The processing of personal data is normally governed by the Privacy Law 675/1996.
The client, who must be clearly notified of the conditions that will be applied in financial transactions, is entitled to a copy of the contract, which must be written in writing and contain:
– the name of the paying agency and the details of the contractor,
– the sum of the loan and the method of financing (number, amount and maturity of the installments – TAN, APR and conditions under which these may be modified – amount and reason for the charges excluded from the calculation of the APR),
– any insurance coverage, required guarantees and higher charges in case of default,
– withdrawal methods.
Consumer loan is mostly obtained through installment loans and revolving loans (revolving loan).
In the first case, the amount is subject to a pre-established repayment plan and to quantified installments from the beginning, if the interest rate is fixed; the loan can be paid directly to the person concerned (personal loan) or to the seller of the goods or services purchased in installments (finalized loan). The second method, on the other hand, provides the consumer with a sum of money that can be used at his discretion; the beneficiary is free to define the repayment plan, ensuring payment of a minimum monthly amount.
Once the loan has been obtained, the contractor must reimburse to the paying agency the amount of the installments by the due date, according to the agreed procedures (through debits to the bank account, postal bulletins or other). The consumer must promptly notify the lender of any changes to his data or contact details that have occurred during the duration of the contract, so as to avoid possible problems.
The customer can always pay off the loan early, paying the residual amount, interest and other charges accrued up to the time of extinction; moreover, if the contract provides for it, it is necessary to pay a further tax that must remain within the limits established by law (today 1% of the remaining capital).