#toptip campaign: Online consumer credit. Here’s what you should know before the agreement
Did you know that it’s now possible to take out consumer credit products through digital channels, online or via your mobile phone?
Check with your bank if the credit product you want to take out is available through digital channels and find out the conditions required for this.
Regardless of the channel used, institutions must provide you with clear and complete information at the various stages of the application as well as the means for you to clear up any questions you may have.
Check if your income is sufficient to pay off the debt you want to take on and any other you already have. Bear in mind that credit instalments are a fixed monthly expense in the household budget, with an impact until the loan is fully repaid, so you should take into account your income and the expenses you anticipate having in the future.
#1 Make sure that the institution is authorised to grant credit.
- Confirm that the institution is registered with the Banco de Portugal and that it is authorised to grant credit. Never take out a loan with an entity that is not authorised to do so.
#2 Check the security of the credit institution’s website or app.
- Check that the address you want to access begins with “https://” and that a miniature padlock appears at the end of the address or in the bottom bar of the window. If this is not the case, the page is not secure.
- Only install apps from official app stores.
- Follow the usual security procedures to protect your computer, tablet or mobile phone:
- Keep antivirus and anti-spyware programs up to date;
- Don't click on links or download content from unknown sources;
- Don't use public or unknown wi-fi networks;
- Don't use public devices to make payments or other banking transactions.
Don't enter your data (name, mobile phone number, email, citizen card number, bank account numbers or credit card numbers) on sites that you're not familiar with or whose authenticity you don't trust
#3 Compare different options before taking out a loan.
- Provide the credit institution with truthful and complete information and clearly state the purpose of the loan you want to take out. Different types of consumer credit have different purposes, terms and associated costs.
- Before you decide on a loan, compare different options
- Institutions should prominently display information on the key characteristics of the loan, fees and any charges on the screen or homepage of the marketing platform. This information should be presented in larger characters, information boxes, simulations, summaries or other similar means.
- Download and carefully read the standardised information sheet, which describes the loan's main characteristics.
- Carefully analyse all the information provided and:
- Consider all the costs of the loan, checking the APR – the annual percentage rate of charge – and the total amount to be reimbursed of the credit options;
- Check whether the credit options include the purchase of other products. The interest rate may be lower if you agree to buy certain proposed products; however, these products usually have costs;
- Pay attention to the loan term. Loans with longer terms generally have lower instalments, but you will have to pay interest for longer.
#4 Answer all your questions before taking out the loan.
- Find out about the applicable procedures. Institutions are obliged to present the stages of the process and the elements required to take out the loan on the screen or on the homepage of the marketing platform so that the following are clearly obvious at the outset:
- The various stages of the loan process;
- Whether it’s necessary to use other channels, devices or means of communication during the loan process;
- The documents that are necessary to take out the loan.
- Institutions should provide you with assistance regarding the loan, the stages of the process and the documentation required, for example by providing a support line or live chat, a chatbot, answers to frequently asked questions, an infographic or an explanatory video.
#5 Read all documents carefully.
- Check the options associated with the loan, such as optional cross-selling of other products (e.g. insurance or credit cards) or the financing of charges, and select them only if they are beneficial to you. Please note that these other products should not be pre-selected and are always optional, i.e. you are not obliged to choose any of them to have access to the loan. Be aware of the possible impact on the total cost of the financial product by checking the effect on the APR and the total amount to be reimbursed.
- In order to proceed with the contracting process, you will have to consult all the pages of the mandatory information documents, such as the standardised information sheet and the draft agreement, and confirm that you have read everything at the end of the documents.
#6 Confirm your wish to take out the loan.
- The institution should inform you in advance of the methods available to confirm your wish to take out the loan, which may include a qualified electronic signature, Digital Mobile Key or strong customer authentication.
#7 You can exercise your right of free revocation and early repayment.
- On the marketing platform, on the website or the app, the credit institution provides you with a dedicated space to communicate your interest in exercising the right of free revocation. This means that you have 14 calendar days from the date of signing the agreement to withdraw from the agreement without having to justify the decision to the institution. Once the right of revocation has been exercised, you have a period of 30 days to pay the institution the capital and interest accrued from the date the credit was used until the date the capital is repaid.
- To repay all or part of the credit before the term laid down in the agreement, you must notify the institution by the means indicated to this effect. To exercise this right of early repayment, you may have to pay a fee.
#8 Analyse the information sent to you by the institution during the term of the agreement.
- Pay attention to the notifications the institution sends you by email, SMS or push notifications, informing you that relevant information is available in the private area of the institution’s marketing platform, website or app (namely, changes in contractual conditions regarding fees and expenses that may be applicable).
- Check the detailed statement that the institution should provide on a regular basis with information on the evolution of the loan.
- Find out what means are available to you to file a complaint or resort to alternative dispute resolution.
#9 Pay the agreed instalments on time and keep your data updated with the institution.
- Pay your loan instalments on time.
- If you have or anticipate having difficulties in paying your instalments, notify the institution so that it can promote measures to avoid default (Pre-arrears action plan).
- Always inform the institution of changes to your address, contact details or other relevant data.