The right to refuse credit
Every Latvian citizen has the right to refuse credit. Pursuant to the Consumer Rights Protection Act, the borrower may exercise his right of cancellation within 14 days of the conclusion of the credit agreement without giving the creditor any justification for such refusal, or within 14 days of receiving provided that they are received after the date of conclusion of the credit agreement. Pursuant to the consumer credit agreement, the borrower shall notify the creditor of the exercise of his right of withdrawal in writing or in any other form acceptable to the creditor. The creditor must submit the right of cancellation before the end of the credit cancellation period. It is very important to remember that, in exercising the right of withdrawal, the borrower must reimburse to the creditor the full amount of the credit granted and the interest accrued during this period, no later than 30 days after notification of the application. The interest shall be calculated on the basis of the interest rate fixed in the contract. In exercising the right of withdrawal, the creditor shall not be entitled to claim from the borrower any compensation other than the reimbursement of non-repayable costs made by the creditor to a public person. When entering into a credit agreement, there may be situations where the borrower and the lender have concluded an additional service agreement with a third party, but if the borrower exercises the right of withdrawal, the additional service agreement is also void. Notwithstanding the exercise of the right of withdrawal, where the borrower’s credit agreement is for the purchase of a good or service, the purchase of the good or service shall remain unaffected.
The right to refuse credit also applies to quick borrowing
Short-term loans, even to those repayable within 30 days. In this case, a situation may arise where the borrower waives the credit within 14 days of exercising his / her right of cancellation, but he / she must repay the amount of the loan and accrued interest until 30 days, thus seemingly inadvertently extending the loan repayment term. from the expected 30 days to 45 days. However, it should be borne in mind that the borrower will still be required to pay interest for the full 45 days, not the interest accrued up to the date the loan is applied for. Section 12.1, paragraph 3, of the Consumer Protection Law contains this clause, but in order to avoid unnecessary and unnecessary misunderstandings between the two parties, both the borrower and the lender, this clause of the agreement must also be included in each specific bilateral credit agreement. It should be noted that Section 12.1. Article 8 (8) lists a number of exceptions to this consumer right of withdrawal. Consumer cancellation rights do not apply to credit agreements for the purchase of real estate or, where the repayment of these loans is secured by a real estate mortgage, to credit terms under which the credit is granted without payment of interest or other credit-related costs. for credit agreements where the loan amount does not exceed EUR 140. The borrower, exercising the right of withdrawal, is obliged to return to the lender the item purchased or the object produced as a result of the service provided. If the purchased good was used for purposes other than those for which it was intended, the borrower is liable, as the consumer is liable for the diminished value of the good, but unless the seller or supplier has informed the borrower of the right of withdrawal under consumer protection law., the consumer (borrower) shall not be liable for any diminished value of the good.