Everyone's experience with borrowing money will be different, but there are some things all borrowers will go through when getting a loan. Below we have set out some tips and important information for you to keep in mind.
Before choosing a loan
Do your research and shop around
You have a choice, so shop around. Whether online or in-store, lenders must make their interest rates, fees, and standard contract terms publicly available to help you make an informed decision.
When you are buying goods don't assume that you have to take a loan from the person you are buying from. For example, if you are buying a car, you don’t have to take out your loan at that car dealership. It might not be the best option
Your lender must give you key information about your loan including interest rates, fees, and any items included as security before you sign a contract – so there are no surprises. Make sure you read this information and understand what it means. If you have any questions about what it means ask your lender or get some independent advice.
Make sure you know how much you have to pay and when.
Your lender must keep you informed of how your loan is progressing, generally by way of regular statements, at least every 6 months and every 45 days for revolving credit or by giving you on-line access to your account information.
If something unexpected happens (eg, illness, relationship breakdown or loss of employment) which reasonably affects your ability to pay your loan, you may be able to make a hardship application. If granted, your lender can change the terms of the loan.
You can also seek budgeting advice from community agencies such as Citizen’s Advice Bureau or The National Building Financial Capability Charitable Trust.