What should the loan agreement contain?

The design of the loan agreement protects the borrower and the lender in accordance with banking law. When establishing credit cooperation, it is difficult to talk about formal deviations.

Credit theory related to banking law refers to credit as part of purpose. The borrower undertakes to repay the amount of the liability, pay interest and commission.

Lending is the most important goal of retail banking

Lending is the most important goal of retail banking

Bank credit is the most popular product in retail banking ensuring maximum profits from similar activities. Due to the purposefulness of the debt, the bank is able to control the circulation of its own money and terminate the contract if there are risky premises.

Pursuant to the regulations of the Polish Financial Supervision Authority, banks may not take excessive risk of servicing liabilities, as this threatens macroeconomic problems. What does a secure loan agreement consist of?

Basic conditions in the contract


The presentation of the parties to the contract is the first, basic element that requires a creditworthiness analysis (qualitative and quantitative assessment). The next point is the amount and currency of the loan. In some types of loans, e.g. mortgages, they have been statutorily withdrawn from foreign currencies. Most often, the loan is in the currency of earnings. Thanks to this there is no speculation.

There is no purpose in cash loans. Therefore, a cash loan is actually a cash loan, which differs in terms of the contract structure from a standard loan. Cash loan is only a colloquial name for a debt product intended for any consumer purpose, which is worth understanding before comparing offers and signing commitments.

Contract optimization

Contract optimization

The rules and repayment date of the loan result not only from the bank’s regulations, but also from the guidelines. The longest possible mortgage loan repayments, and the shortest cash loan. The longer the repayment period, the higher the cost of total debt. An aware borrower should shorten the duration of the contract as much as possible in order not to expose himself to economic risk.

The loan agreement includes the interest rate and prospects for change over time. Unfortunately, each loan is directly related to the monetary policy pursued by the National Bank of Poland, in other words the central bank. Low interest rates encourage you to take a cash loan, and high discourages due to the appearance of a larger monthly installment. The loan aspect also includes a collateral aspect. With positive creditworthiness, not necessary, especially as part of consumer loans.

A brief overview of key credit collateral groups

The most popular collateral includes the signing of a blank promissory note, pledge on securities and other goods, debt insurance combined with the assignment of rights to the lender, mortgage. Due to the secured property, the borrower usually receives much better repayment terms. The value of collateral therefore has a positive effect on the terms of the contract.

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