Undo small loans, is it? Well, the law states that all individuals have the right to cancel within 14 days of purchase of goods or services sold on the Internet, by phone or by outreach vendors in the home.
In an agreement between a private person and a company, the individual is usually the weaker party and the consumer purchase law is therefore to some extent compulsory for the consumer’s benefit. This means that a company must not give the consumer worse conditions than those in the law.
Does the right of withdrawal apply to SMS loans?
- Does the right of withdrawal apply to SMS loans?
- Have loans you don’t need?
- How do I repay small loans?
- Form for undoing loans
The right of withdrawal applies to all unsecured loans and thus also to SMS loans. Since the quick loans that are taken online often have a short repayment period, many believe that it is not possible to repay and pay back the money. However, the consumer purchase law applies to large as well as small Internet loans.
The right of withdrawal applies to all loans
Have loans you don’t need?
It is quick and easy to take a small loan with immediate payment online and there are no willing creditors missing.
The fact is that there is a very large number of players operating in the market for consumer credit. Big money is invested in marketing in competition if customers fill the newspapers’ digital editions of advertising with offers of quick and simple credits.
Aggressive marketing affects and leads to many impulse purchases that otherwise would not have happened.
The same applies of course to loans and credits.
A consumer credit is a product in the form of a service and the legislator has therefore ensured that consumers have the same consumer protection when consuming these services just as with other purchases.
If you have taken a quick loan that you then found that you do not need, you have the right to undo the small loan within 14 days and pay it back. You must get in touch with the lender and state that you want to exercise your right of withdrawal.
How do I repay small loans?
The best method for undoing small loans is to send an email. In the letter you write that you want to undo the loan and repay the money.
You do not need to state any reason, but it should suffice to refer to the legislation. By sending an email it is easy to prove that the termination of the agreement has been sent within the 14 days required. The borrowed money must be returned to the bank as soon as possible. You must pay interest for the days you have had access to the money.
However, you should not pay any fees for the loan, such as lay-up fee. If you have already done so, the bank will repay them.
Should I pay interest if I regret it?
Even if you regret it, you will not get rid of all costs. Undoing an SMS loan is therefore not a working method for getting free loans and avoiding the interest rate.
If that is the purpose, it is better to find an interest-free loan instead. The interest for the time you have had access to the money until they are returned to the lender must be paid back together with the loan amount.
The lender’s responsibility to inform
Regardless of whether the lender is a bank, consumer credit company or credit market company, it is their duty to inform the customer of the right of withdrawal in connection with the signing of the loan agreement.
The information must be clear containing everything that the consumer needs to know and that he / she has the right to exercise his right of withdrawal if so desired. Information on how the customer should proceed to use his right of withdrawal must be stated as well as how long the right of withdrawal is.
Each company can choose to apply the law strictly and adhere to the minimum requirements, but nothing prevents them from offering more generous conditions than they must.
Form for undoing loans
The Swedish Consumer Agency has developed a standard template that can be used to inform about the right of withdrawal.
Companies are advised to inform their customers about the consumer agency’s withdrawal form so that they can use it if they want to cancel the loan. The cancellation form can be downloaded in pdf format at the bottom of the page.
When does the right of withdrawal begin to apply
The time that a borrower has the right to regret is called the withdrawal period. The withdrawal period starts on the day that the consumer has access to the money in his account and no earlier than the day the consumer has been informed of the right of withdrawal. If the consumer does not receive any information about the right to undo the loan, the right of withdrawal will be extended to one year.
If the company refuses to cancel the loan
The Consumer Purchase Act is a civil law. It is not possible to report a company to a police because they act in violation of the legislation. The best way to act if you think a company violates the law is to turn to the General Complaints Board for review of the case.
If a company does not comply with a recommendation from the General Complaints Board, it is possible to initiate a purchase law dispute by filing a lawsuit with the court. If the loan is less than SEK 20,000, the costs that can be paid are limited if the target is lost.