It has becomerelatively common to use loans finance for more expensive purchases. Debt finance can be the use of a loan, a leasing, an instalment as well as a credit card. These are all types of consumer credit and subject to the same acts.
As of July 2011, the principles of responsible lending have been legitimated in Estonia, just as elsewhere in Europe, establishing obligations for lenders and consumers.
Before taking a loan, an instalment or a leasing, or before starting to use a credit card
compare offers from multiple creditors: ask two or three different undertakings for offers before making a decision;
in addition to the offer, ask for an information sheet to compare terms and conditions (the information sheet lists all important loan terms);
in addition to the information sheet, you can also ask the creditor for a copy of the draft contract to thoroughly examine it before signing.
If you have to have insurance to enter into the contract (for example, for leasing a car or taking a home loan) then keep in mind you have the right to conclude an insurance contract with an insurance provider of your own choice, not only with the insurance provider recommended by the creditor.
You can withdraw from the consumer credit contract without a justification within 14 days. In case of a consumer credit contract linked with residential property, the consumer may withdraw from the consumer credit contract within seven days.
The withdrawal from the contract does not have to be justified to the creditor. If you wish to withdraw from the consumer credit contract and the sales contract economically linked with it within 14 days because the object received on the basis of the contract has a defect, the defect must be notified to the vendor. Nonetheless, the creditor nor the vendor cannot prevent you from implementing the right to withdraw and you do not have to agree with the compensation (repair, replacement).
You may partially or fully perform obligations rising from the consumer credit contract before the prescribed time. In this case you do not own the creditor interest or any other costs for the period the loan was not used. The creditor has the right to ask you for reasonable compensation based on the essence of the loan interest and the load period. The basis for the right of prescheduled repayment and refund allocation is stipulated in § 411 of Law of Obligations Act.
- Assess your ability to pay adequately (consider all your monthly purchases) and be honest when providing this information to the creditor.
- Find out what might happen if you are no longer capable of paying.
- Read the terms and conditions of the contract and ask for addition information if anything remains unclear.
- In case of difficulties in repaying the loan, do not ignore the situation and get in contact with the creditor.
- If necessary, consult a debt adviser.