Before applying for a loan from a financial institution, have you investigated other options, such as assistance from your family, close friends or the company for which you currently work?

Please make sure that you understand the following information before signing a loan agreement or contract.

What should you consider before accepting the offer of a loan?

• The amount of the loan (the principal)
• The interest rate you must also pay
• The way interest is calculated
• The repayment schedule (time to repay)
• Any additional fees or charges and when these could apply to you
• Your monthly income and your existing and foreseeable financial obligations
• Your ability to repay in full the loan instalments on the agreed dates, as well as meeting all your other financial obligations on time

What must you remember if you borrow money?

• A loan is a legal and financial commitment.
• Get all the information you need from the moneylender before signing.
• The contractual and the effective interest rates are different. Ask the moneylender to state the effective interest rate too.
• Be sure to understand all the terms and conditions of the loan, including the consequences of late or missing repayment.
• Find out what the late payment fees are, as well as any other exceptional charges.
• Consider carefully before making any contractual agreement that allows a moneylender to lodge a caveat on the proceeds of the sale of your property if you default on loan repayments. A caveat prevents you from selling your property without repaying the moneylender in full.
• By law, moneylenders must fully explain the terms and conditions of a loan to you in language you understand.
• By law, moneylenders must also fill in the correct amount for the principal and the interest rate.
• Borrow only what you really need and can repay.
• Check the Registry of Moneylenders. You can download a list of licensed moneylenders here.