How to return insurance for a loan? Return of insurance on a loan: methods and conditions
Issuing a loan is almost always a risky business for both banks and borrowers. In this regard, many banking organizations sell insurance products to their customers when they draw up a loan agreement. This procedure is extremely important for financial institutions, because it reduces the risk of non-payment by the borrower of funds issued. How to return insurance for a loan? In what situations can this be done?
Is credit insurance legal?
If a bank provides one service to a client, it does not have the right to impose another on it. Thus, it is illegal to impose insurance when applying for a loan. Therefore, if the bank forcibly sold another service to the client, the bank has the right to demand the return of the loan insurance and pay damages.
Some financial institutions are beginning to refer to the fact that the agreement was concluded by the insurance company, and not by them. However, if the contract with the borrower was concluded by the bank and the insurance company, it is not considered legal. Insurance is imposed and is not related to the loan agreement. According to the Law on Consumer Loans, banks are not entitled to force potential borrowers to enter into insurance contracts.
Is it possible to return the insurance?
Often in their ignorance, borrowers purchase an insurance product. This already means that they agree with all the provisions of the contract. Quite often, a line stating that the borrower has no complaints against the bank is written in one of the points of the document. Therefore, financial institutions in most cases insist that borrowers buy insurance by their will. And when the loan is repaid, not all the paid funds are credited to the client. Banks can only return the amount that is proportional to the period of validity of the agreement.
If the court joins the consideration of the complaint, the decision may be made in favor of the client or the financial institution. It all depends on the essence of the contract, evidence, arguments.It is impossible to receive paid money when the contract was concluded more than 3 years ago. It is impossible to return money in those situations if the agreement contains a clause on the impossibility of returning upon its early termination.
Types of insurance events
Before you consider how to return insurance for a loan, you should disassemble the types of products that are issued by banks. They may offer insurance for a loan, mortgage, or the life and health of a client. It is important for a financial institution that the loan is insured, as it will be able to return the funds issued in any situations.
Insurance pledge must be made necessarily. If the property, which is a pledge, becomes unusable, the debt will be repaid by the insurance company. It is advisable to insure life and health when the client repays the loan over a long period of time.
Mortgage and car loans
How to return insurance for a loan that was taken for the purchase of housing or a car? Make it almost impossible. The fact is that in these cases the insurance of the pledge, namely the property, is carried out.At the same time, it is impossible to terminate the insurance contract until the loan is fully repaid. The only exception may be situations where the borrower repays the loan fully ahead of time or fully pays insurance premiums.
How to return the loan insurance for the goods? Make it much easier than in the above cases. There are two possible return schemes. The first is to abandon the insurance product. The second method is the termination of the contract with the insurance company during the period of validity of the policy. The above procedures are relevant for cases where the debt has not yet been repaid.
How to return the insurance for early repayment of the loan?
Quite often, one of the conditions of crediting is the annual payment of the insurance policy. Therefore, in case of early repayment, borrowers may require the bank to return the money that was paid after this point. In order to refund the money paid, you must contact the bank and write a statement there. In this case, the financial institution may compensate for the amount paid in excess of the required amount or refuse to return it.If the bank refuses, the borrower has the right to go to court and demand that unjust enrichment be collected from the financial institution.
If the loan is repaid
Some insurance contracts contain clauses according to which the borrower has the right to partially return the money paid at full repayment of the loan. How to return insurance for the loan paid? Such situations often occur when the bank simultaneously performs the function of the insured. However, in most cases, loan agreements do not contain this condition. Therefore, the borrower can restore justice only when applying to the court.
If the loan agreement is still valid
How to return insurance for a loan in a bank that is still repaid by the borrower? This can be done only within one calendar month from the date of receipt of funds. The borrower needs to contact the bank and refuse in writing the insurance product. This development is possible only in the case of consumer loans.
How to return insurance for a loan in Sberbank?
If you apply to Sberbank within 30 days after receiving the loan funds, the insurance will refund the money in full.However, if the client applies at the end of this period, then the bank may only refund the insurance premium. In order to repay funds for the imposed insurance, the borrower needs to contact the branch of Sberbank, where he took the loan, and write a statement.
You should have a passport with you. The case will be considered for a maximum of one calendar month. If the decision of Sberbank is positive, the funds will be credited to the card or account of the borrower, which he indicated when writing the application. When the bank refuses to return the funds, and the borrower did not violate the terms of the loan agreement, he is entitled to go to court. The same procedure will be with the reimbursement of insurance in other financial organizations. It is important to remember that the borrower needs to pay lawyer services and other legal fees.
If the bank cheated from the start
Often, clients are not warned by bank employees that they sign a loan agreement and at the same time apply for insurance. This information is often ignored by the employees of the contact centers who draw up applications for the issuance of loan funds by telephone.And when the borrower signs the contract, the application for which has been previously approved, he is given a smaller amount than specified in the contract. The remaining funds go to pay for the services of the insurance company. Therefore, the loan agreement must be read very thoughtfully, because there will certainly contain information about insurance.
How to return the imposed insurance for the loan, if such a situation has already occurred? This can be done by contacting the bank or in court. However, the return of funds is unlikely to succeed, since the borrower has already put his signature in the contract. This means that he has read and agrees to the terms of the agreement. It is this argument and lead banks. But, based on judicial practice, we can say that the courts often side with the debtors. First you must file a claim with the bank, and then go to court.
What to do if the bank refuses to return the funds?
The natural reaction of any bank to such a request from a borrower is unwillingness to return funds. Therefore, financial institutions are often trying to reduce the amount requested by the client, arguing that there are additional costs during the insurance period. You can solve this problem by requiring the bank to calculate the actual costs.The only item of expenses may be contract maintenance, when the insurance agent is paid a commission.
The borrower needs to insist on the return of the full amount, and if necessary, write a claim to the bank management. A refusal can be obtained if the 30-day period has expired or if the client has indicated little information about the loan issued. Time is not worth it, if the bank refuses to return the money, you must immediately go to court.
The impact of the refund on credit history
The borrower's credit history does not contain information about insurance payments. In this regard, the credit file will not be updated with information on the return of funds for the imposed insurance, even if there was a trial.
How to return insurance for a loan? This can be done only in cases with consumer loans. For a refund, you need to contact the bank with the appropriate application within 1 month. If the financial institution refuses to return the funds, the borrower can go to court. He will take the side of the borrower, if he did not violate the terms of the loan agreement.