Loans

According to the advertising, you will easily get a loan, even without a guarantor and very conveniently, right from your sofa by phone, without any fees or verification in the banking register, without an income confirmation and even with the option of premature re-payment. But what is the reality sometimes? Usurious interest rates, loss of the pledged property and ever present risks. The notary will advice you, how to borrow money safely money and not to loose the money you have lend out.

 

The notary – an impartial arbiter     

The notary (unlike e.g. an attorney, who represents one of the parties) stands always „between the parties“, not preferring any of the parties in the act and providing each of the participating parties with the same security and certainty.

The best way is to approach a bank and not a non-banking company or kith & kin. In any case - you will be advised to entrust yourself into the hands of a notary and draw up a loan agreement in writing.

From the legal point of view, the creditor cedes items (specified by kind) to the debtor, especially money and the debtor obliges (after the elapsing of a certain agreed time) to return items of the same kind. The institution of loan agreement is regulated in the sections §657 and §658 of the Civil Code.

 

Notary = Certainty 

When a notary draws up a contract, he is solicitous about its legality, compliance with good manners and non-usurious interest. Should risks arise from the contract, he will remind you of them. You should approach every loan carefully and consider your actual situation.

 

How should a loan agreement look like? 

A loan agreement must contain the exact designation of the contracting parties – the creditor and the debtor. It is necessary to precisely define the creditor's obligation, the interest rate and the loan's maturity. The agreement shall contain also the collateral for the loan and the applicable default interest in the case that the debtor would not repay the loan in time.

It often happens that the debtor actually calculates and relies on tedious hold-outs and delays in court, with the premeditated intention not to pay the creditor at all. You can assure the payment through a notarial protocol, having the nature of an executory title. Pursuant to the Act No. 233/1995 (Coll.) on bailiffs and distrain activities (§41 subsec. 2) - it is possible to distrain property also on the basis of notarial protocols containing the legal obligation, designating the entitled and the obliged entity, the legal reason, the subject and time of performance. The debtor does agree in advance with the executory title in that notarial protocol and the creditor achieves a quicker repayment of an uncollectible loan.

We recommend sending the money to the debtor by bank transfer or depositing it directly on his bank account at the bank. In this way you will have documentary proof of having really lent the money.

 

Discharge of Contract

A loan agreement discharges with the issuance of a confirmation on the repayment of the obligation.