If you have a desire to take out a short-term consumer loan, then it should take 48 hours from you get your loan offer until you can accept it and get the borrowed money paid off. However, this has not always been the case, as this is a relatively new rule that has been introduced as a result of the growing number of consumer loans being issued online.
What types of loans are covered by the reporting period?
However, not all loans are covered by this period. In addition, not even all types of consumer loans are covered by it. If the loan is to be covered by this period, then it is a requirement that it is a loan that meets the following aspects. If it does not, it is not covered by it.
- No collateral is required for the loan
- There is no requirement that you purchase a product or service when you take out the loan
- It is not a loan granted by a bank (a regular bank)
Not only that, it must also be made clear that it is a prerequisite that this is a loan that has a maximum term of three months. In the case of a consumer loan having a maturity longer than three months, it is no longer considered to be short-term and will therefore not be covered.
How does this happen?
If you would like to take out such a loan, you must first apply for one of the lenders who can give you the loan. It typically takes place directly on their website. Once you have done this, you will shortly receive an offer from this lender. In the past, you could simply accept and receive the money from the lender.
However, this is no longer possible. Today, you can only have the loan paid off 48 hours after you receive the offer. You must also contact the lender yourself so that you can explain to them that you would like to accept the loan and have it paid off. Not everyone is in favor of this idea, but there are several reasons why it was introduced.
Why has the time for reflection been introduced?
The type of loan that is affected by this period is loans where there is no requirement for a collateral for the loan. These are also loans that have a short maturity, often no longer than one month. Therefore, it is also a loan that many are tempted to, as they can thus quickly and easily get money between their hands.
However, it has been found that a large part of these loans are not repaid on time. If it does not, then it can become very expensive for the borrower. Even the very small loans can prove to be very expensive in the long run. One thing is that high interest rates are imposed, but you can also risk being sent to debt collection where you have to pay the fee.
The reflection period should cause the consumer to reconsider the loan
The idea of introducing a period of reflection is that it should get borrowers to consider their loans an extra time. It may be that when they find a cheaper solution, they may be allowed to borrow money from someone in their family, or completely find that they do not need to borrow money, because it is for example. just should have been to buy a new TV.
Already, reflection time has had a positive impact on the Danish loan market, although you have to wait a little longer to get your money paid off.