A lender is a person or organization that provides financial loans. Probably no one likes to borrow money, but often because of the need to resort to the services of credit organizations. The need for money can be different: the family simply does not have enough money to live on, to buy goods, or to develop a business. What unites all these situations is the fact that a civil law relationship is created between the borrower and the borrower.
The essence of the concepts of "creditor" and "borrower"
The creditor is one of the subjects of civil legal relations (it can be both an individual and a legal entity), which has the right to require the other party (borrower) to perform certain actions. Which ones? Of course, fulfill the obligations of the contract. The type of action depends on the state of debt (current or past due).
The borrower is one of the parties to civil law relations. A person takes money in debt, assuming the obligation to return it with the interest specified in the contract on the agreed date.
Creditors Rights
Note that the rights and obligations of individuals providing a loan are not unlimited. All rights of the lender must be indicated in the loan agreement. If the creditor forces the debtor to carry out some actions outside the scope of the rights specified in the contract, the debtor has the right not to fulfill this requirement.
The most common rights of creditors:
- increase in interest rates for the use of funds. This can happen both unilaterally and with the consent of the borrower. If a person uses bank credit, the bank informs about changes in the terms of lending by means of SMS messages or ordinary letters. The client expresses his consent if he does not send a protest within a certain number of days;
- require early repayment of a loan when:
a) repeated non-payment by the client of the amount of the monthly payment;
b) in case of revealing the invalidity of the documents provided by the client for processing documents (passport, income statement, etc.);
at) seizure of property The borrower due to non-payment of another loan;
d) confiscation of part or all of the property of the Borrower by third parties.
The lender is an entity that risks its money, therefore, in case of failure by the borrower to fulfill its obligations or deterioration of the financial position of the borrower, it has the absolute right to take actions aimed at protecting its interests. Repeated delays or false documents of the borrower indicate its unreliability, therefore, maximum effort is immediately applied to return the funds issued. There are times when quite conscientious payers have difficulty paying their fees. In such situations, the lender must respond appropriately, that is, you need to understand how complex the problems are and help the borrower ease his financial condition by debt restructuring. But if the borrower begins to lose his property, then the bank should understand that it is unlikely that the borrower will have financial stability in the near future, so it is better to demand the return of the entire amount of debt already at this stage.
Lender Obligations
It seems to say that the bank has some obligations to the debtor and is illogical, but it is. Let's talk about the main obligations of the lender to the borrower.
An individual or organization must provide the debtor with the full amount of the loan as soon as possible after the conclusion of the contract.After all, if a client takes money on loan, then he needs it urgently!
The lender is required to monitor the timeliness of making loan payments. A few days before the date of monthly payment, it is logical to remind the client about the need to make money.
In addition, the creditor does not have the right to demand a return of the debt from the debtor if the person who took the money is declared bankrupt in court. Probably the most important obligation of the lender is to keep secret about all financial transactions related to the current account of the borrower. Information may be disclosed only by court order.
Is it possible not to repay the loan?
In most cases, the answer to this question will be negative. People ignorant of the financial sector think that bankruptcy of a creditor will allow them not to repay the remaining amount of debt. Unfortunately, this is an illusion. Once a bank is declared bankrupt, a provisional administration is introduced. The main task of the liquidators (often the interim administration performs such functions) is to repay loans issued by a financial institution. We have already said that a lender is an organization that risks its money. But, as it turns out, each lender knows well how to get his money back.
How do bankrupt banks repay loans?
Methods for completing a task are different:
- the requirement for all borrowers, including those in good faith, to repay the full amount of the debt up to a certain date;
- sale of a loan to another bank.
The proceeds are used to pay off the debts of a bankrupt bank, because such banks, based on experience, always accumulate a lot of liabilities.
