Loaning money without a contract sounds very tempting. Adverts, the internet, and even the street light columns are full of ads that offer a similar option. Such channels may be unsafe and unchecked when borrowing and borrowing can be very dangerous. You need to check the terms under which you borrow money, but also the source from which you borrow. Such solutions, where there is no contract, paper, and documentation, usually drag and drop money from insecure bills or even through a physical way, losing any trace of the money ever borrowed.
What all the pitfalls are hiding money without a contract?
Banks do not offer money without a contract, but their clients require a formal contract, whether they are loans, loans or borrowings. This is ensured if the borrower does not respect the terms that he has signed in the contract. If such a contract does not exist, either side, whether it is a lender or a borrower, may lend the terms for borrowing money at its sole discretion. This means that everything can be changed, from the repayment period, the principal and even interest rates. And that is one of the bad sides of this way of borrowing money.
Better option than unreliable financial institutions are some Internet loans, as well as banks and other credit institutions that have the approval of the Creative Bank because they offer a safer way of borrowing money. Banks check their client’s creditworthiness based on their income, savings, and types of employment. Based on this, the client agrees with the bank on the terms of the loan, the methods and terms of repayment and the interest rate at which the borrowed money is returned.
The contracted funds are transferred exclusively to the current account of the person who has submitted the loan request. This reduces the likelihood of malpractice of a variety of types, such as lending money without a contract, and the borrower or borrower is informed in advance of what he expects from the repayment period, the interest rate and the manner of returning the borrowed money.
The contract should clearly state all the terms for borrowing money
The contract with which the two parties need to agree should point out the loan amount, the interest rate, the type of interest rate and the period during which the borrowed amount should be repaid. The written footnote provides a transparent business for both parties and helps resolve possible appeals and court disputes.
Loaning money without a contract leaves no trace
The biggest risk is lending money without a contract because there is no written record, so whoever lends money can say that money has never been borrowed or the other side, the borrower can say that the same money never got. It must be ensured that there is a written record of borrowing. This is proof that you have lent the agreed amount of money.
The contract protects the borrower or the borrower
It is best to borrow money without written evidence. Some credit institutions do not do so, but keep in mind that the contract protects the borrower or the borrower. You do not need to lend money until you have set clear terms. The contract is recommended before signing up to read well and seek legal advice or advice from a financial expert if not all clear. Smaller letters often hide traps and should be timely insured against unnecessary penalties.