If you’ve taken a loan in the past, you’d know that it’s a time-bound legal contract that you’re signing up for. As with any contract, it’s based on a foundation of trust that you will return the money you’ve borrowed, with an agreed amount of interest. But the story doesn’t end there. As a borrower you have responsibilities too, throughout the journey of your loan, from before you sign up until you formally complete and close the loan
Read the fine print before your sign ANYTHING
We cannot say this enough. As tiresome as it may be, you are obliged to read and understand ALL the fine print in your loan document BEFORE you sign up for your loan. A responsible lender will ensure that your loan summary is as brief as possible and is written in language that anyone can understand, and not complicated legal and financial jargon. However, you must remember that once you sign up for your loan, it is implicit that you have read all the terms and conditions and agree to each one of them.
ASK the small, stupid questions
Do. Not. Rush. While every lender promises loan approvals and pre-approvals, don’t let the glitzy marketing push you into signing up for something you don’t fully understand. No question is too small or too stupid, especially when it comes to your hard-earned money. Feel free to ask the smallest and silliest questions to the in-store sales representative or at the customer care or online helpline before you sign up.
Pay on time, every time
By signing on for a loan, you borrow a certain sum of money, with the understanding and agreement that you will repay a certain amount, with interest every month on an agreed date. This is the basis underlying principle of trust and faith that any lender has in a borrower. Your due date for payments each month should be clearly listed on your loan summary document. Make sure you remember the date and make your payments every month, before the due date. An easy way to do this is by activating ECS or Direct Debit from your bank account. Skipping even one payment can lead to a late payment charge and a lowering of your credit score, that could impact your future loans.
Share your details accurately
As a borrower, it’s your responsibility to share your accurate and updated details with your lender. This includes details of your name, address, contact information and any other loan-related details that you need to provide as per law. Sharing these details will keep the lines of communication between you lending company and you open and clear at all times.
Changes to your life situation? Notify your lender
Life doesn’t always go as expected. There can be unforeseen changes to one’s life situations, such as the loss of a job, an illness or a financial burden, that could impact your ability to repay your installments each month on time. When something of this nature occurs, as a borrower of an on-going loan, it is your responsibility to let your lender know about the change. A responsible lender will understand that such unforeseen circumstances can occur in anyone’s life, and once established that your concern is genuine, will try to work out a solution such as a payment holiday or a deferred due date, that will work for both you and the lender.