When taking out a loan, be it large or small, a borrower should not sign the contract until they are confident they fully understand their rights and obligations. The loan contract should include the rights and responsibilities of both the borrower and lender, the loan repayment amounts, terms, conditions, interest rates and fees, the obligations that come with having a loan and the results of not making the repayments as agreed.
Borrowers have a limited opportunity to cancel a loan agreement, however, they may be charged interest and fees to cover the administration cost of creating the loan agreement and its cancellation. Lenders are legally obliged to protect all personal information received about borrowers and use it only for the purpose intended.
Late or missed loan repayments may result in serious money problems for borrowers and/or the lender repossessing security items listed in the loan agreement. Not repaying a loan is also likely to result in a bad credit rating for the borrower. The bad rating stays on a credit file for 5 years.
Borrowers need to know that if they have trouble meeting the loan repayments they should contact their lender as soon as possible to discuss the situation and what their options are. This is especially important in cases of unforeseen hardship, such as serious illness or injury, loss of employment or any other significant circumstance that adversely affects the ability to meet repayments.
Borrowers are able to request the current balance of their loan at any time. In addition, lenders must send the borrower a loan statement at least every 6 months. If a borrower is dissatisfied with the service they receive from their lender the borrower is able to make a complaint which can be escalated to an independent complaints authority if necessary.
Acorn Finance is a wholly New Zealand owned and operated consumer finance company offering fast and friendly service to people who need a personal loan. Because we are a comparatively small company, we have more flexibility to tailor our services to customer needs compared with larger companies or more traditional financial institutions.