Before you sign a credit contract
The law provides that lenders must give you certain written information before you sign a credit contract, for example:
- the amount of credit that is to be provided;
- the annual percentage rate(s);
- how interest is calculated and when it is charged;
- the total amount of interest if the loan is paid within seven years;
- credit fees and charges;
- how you will be informed of changes to the contract;
- how often statements will be provided;
- the comparison rate on application for fixed term loans.
You must also be given an information statement that outlines your rights and obligations under the credit contract by the lender.
Putting pen to paper BEFORE you’re ready can get you into BIG trouble
Read the credit contract carefully, especially the small print. A contract is a legally enforceable contract and the law assumes that if you have signed something, you have also read and understood it.
If you don’t understand any part of the contract, don’t be pressured, take it away and get some independent advice, before you sign.
Store your copy of the contract in a safe place.