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Tips Collection

Credit for Renovation: How Banks Deceive and How to Fight Back

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Planning to take a loan for renovation but afraid to go to the bank? Our expert advises always carefully reading the contract terms and not forgetting that the most important details are usually written in small print at the end.

Read this before visiting the bank and save it for future reference: together with a lawyer, we analyze the most important points when signing a contract.

Yuri Kryukov — a legal expert, runs his own blog on Instagram @vkursedela about the rights of co-owners and apartment owners

How to get a loan without making a mistake?

  • Get several offers from different banks with suitable interest rates.

  • Ask managers for a copy of the loan agreement and monthly payment calculation for review.

  • Review the conditions calmly in detail, as specified in the contract.

  • Check the list of services included in the contract, as the bank may try to impose additional services and charge for them.

  • Calculate the full cost of the loan according to the interest rate to identify hidden fees.

  • Pay attention to penalties for late monthly payments.

  • Write down the questions you want to clarify and ask them to the bank employee. If you get vague answers, consult a lawyer.

  • If all the conditions offered by the bank suit you — you can sign the contract.

  • Check your details carefully when signing.
Photo: style, Advice, Legal Encyclopedia, Yuri Kryukov, credit – photo on our siteCan changes be made to a credit agreement?

No, so you need to decide immediately whether the bank's terms are acceptable.

What if the interest rate turns out to be higher than what the manager said over the phone?
What you hear on the phone or read in promotional materials is not always final. All credit conditions must be stated in the contract.

Photo: style, Advice, Legal Encyclopedia, Yuri Kryukov, credit – photo on our siteWhat services can the bank force upon you?
  • Life, health and property insurance;
  • Bank account maintenance;
  • Issuance of a bank card;
  • SMS notifications.

Assess how relevant the service is to you and how much extra you will pay for it.

Can I refuse life and health insurance?
Yes, you can refuse insurance within 14 days from the date of signing the contract. However, this may result in an increased interest rate on the loan. All conditions will be included in the contract.

Can I refuse property insurance?
You can, if it is not used as collateral for the loan.

Photo: style, Advice, Legal Encyclopedia, Yuri Kryukov, credit – photo on our siteIf I missed one monthly payment, will it damage my credit history?

Information about loan repayment is sent to credit bureaus. Violating the payment schedule can worsen your credit history.

However, this does not mean that you will never get another loan: each bank evaluates your history based on its own criteria. Most often, they deny loans to those who had regular late payments.

I sued a bank for refusing to cancel imposed insurance, will this appear in my credit history?
Information about legal disputes with banks does not appear in your credit history.