§ 5-13. The customer's notice of termination of a credit agreement
Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська
In brief
- The customer (kunde) can terminate the credit agreement (kredittavtale) at any time, and a consumer (forbruker) cannot be required to give more than one month's notice.
- Instalments and interest are paid as agreed until the debt is settled, and the bank can demand the money at the earliest from the time the notice of termination (oppsigelse) takes effect.
- Fees and ongoing costs paid in advance must be refunded proportionately.
- The bank has a narrower right to terminate under § 5-14.
The text of the law (unofficial translation)
§ 5-13. The customer's notice of termination
What does this mean?
The customer can terminate a credit agreement at any time, without the bank having to approve it. The parties can agree on a notice period. For consumers the maximum is one month, so a longer period in the agreement does not apply to them. The notice of termination does not mean the debt disappears. It sets an end point for the contractual relationship, after which whatever is outstanding must be settled.
Until the loan is paid off, payments continue as before. Instalments, interest and other costs fall due on the dates set out in the agreement. If the parties have not agreed on a later due date, the remaining debt must be paid in accordance with the rules in §§ 2-9 and 2-10. Under § 2-9, interest and costs are calculated up to and including the day of payment, and the customer can pay all or part of the amount before the agreed time. The bank cannot demand the money before the notice of termination takes effect.
If the loan has a fixed interest rate, the customer must take § 2-10 into account. If the agreement says so, the bank can demand to be compensated for the loss it suffers because the loan is repaid early. However, the customer is not liable for more than the interest that would otherwise have been paid. If the bank makes a gain from the early repayment, the customer must be credited with a corresponding amount, provided that the bank is entitled to compensation for losses.
The customer is also entitled to a refund of a proportionate part of fees and other costs paid in advance for a period that no longer runs. Example: The customer has paid a periodic fee for an entire period in advance and gives notice halfway through the period. The customer can then claim back the money for the time after the notice of termination takes effect.
This section has a counterpart in § 5-14, where the bank gives notice of termination. The customer can terminate with at most one month's notice, whereas the bank needs objective grounds and must give a consumer at least two months. The provision is also linked to § 5-9 on the repayment plan and § 5-10, which prohibits the bank from charging fees beyond what has been agreed in writing. The sections § 3-8 (winding up), § 3-52 (the effect of the service provider (tjenesteyter) terminating the agreement with immediate effect) and § 5-14 refer to this section.