Credit Contracts

Credit Contracts

A credit contract has all the details to help you decide whether the loan you are applying for is worth it or to compare credit schemes from different banks/institutes. Always ask the credit provider in case you do not understand certain clauses.

How to Verify a Credit Contract

Before you sign on the agreement, it is imperative that you check the credit contract thoroughly. Any major or minor oversight can make your dream home loans seem like an untenable deal within a few months. Always check the name and the reputation of the bank, institute or person from whom you are borrowing the money (or to whom you have mortgaged an asset).

You must clearly understand how interest is charged and calculated so that you are well aware of how much you have to pay within loan timeframe. You should also know if it is compulsory for you to provide an asset as a security or collateral for the money you loaned.

Always enquire about commission rate, processing fees, insurance premiums and any other charges that are likely to hike up your actual payment. In most cases, such expenses are considered as hidden charges and not disclosed during the negotiation process.

While the sales people will avoid divulging such details, your home loan credit contract should clearly mention these clauses. The contract should also mention the repayment terms and your penalties for default.

Another point to check is when you are entitled to receive your statements and how you will be informed regarding any changes in the terms and conditions. Always deal with lenders and brokers who are licensed to provide legal credit within Australia.

Are you having difficulty finding the right home and applying for a mortgage?