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

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

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

How to get a loan without making mistakes?

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

• Ask managers for the credit agreement text and monthly payment calculation for review.

• Review the conditions calmly and terms listed in the contract.

• Review the list of services included in the contract, as the bank may try to force you to pay for additional services.

• 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 a vague answer, consult a lawyer.

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

• Carefully check your details when signing.

Can changes be made to a credit agreement?

No, so decide immediately whether the bank's terms suit you.

What if the interest rate on the loan turns out to be higher than what the manager said over the phone?

What you hear on the phone or read in advertising brochures is not always the final condition. All credit terms must be included in the contract.

What services might a bank try to impose?

• Life, health, and property insurance;
• Bank account management;
• Issuance of a bank card;
• SMS notifications.

Assess whether the service is relevant to you and how much extra you’ll have to pay for it.

Can I refuse life and health insurance?

Yes, you can refuse insurance within 14 days of signing the contract. However, this may lead to an increase in the interest rate. All conditions will be written in the contract.

Can I refuse property insurance?

Yes, if it is not collateral for the loan.

If I missed one monthly payment, will my credit history be damaged?

Data on credit obligations fulfillment is reported to credit bureaus. Late payments can worsen your credit history.

However, this does not mean that you will never be approved for another loan: each bank evaluates credit history according to its own criteria. Most often, applications are rejected for those with regular late payments.

I sued a bank over refusal to cancel imposed insurance, will this affect my credit history?

Information about legal disputes with banks does not appear in your credit history.