loan agreement is a document
in which a lender sets out the
terms and conditions under
which it is pr epared to make a loan
available to a borr ower.
The main purpose of the loan agreement is to define
what the parties involved are agreeing to, what responsibilities
each party has and for how long the loan
agreement will last.
Herewith an explanation of the essential terms and conditions of a loan agreement:
(i) The agreement must state the loan amount, interest, charges, total debt, and repayment terms (either once-off or monthly instalments).
(ii)If the borrower defaults, a Consent to Judgment may be signed—but only after default, not at the time of agreement. This form confirms the borrower owes the lender, allowing the court to issue a judgment. Based on this, the borrower may consent to an Emoluments Attachment Order—a court order instructing their employer to deduct part of their salary to repay the loan.
(iii) A cooling-off period of three business days allows the borrower to cancel the agreement and repay the loan amount (plus interest for only the days the money was used).
(iv) Lenders are not allowed to keep a borrower’s bank card or PIN.
(v) Borrowers may lodge complaints with NAMFISA by completing and submitting a Complaint Intake Form if they are treated unfairly.
(vi) Before finalising the loan, the lender must:
Herewith an explanation of the essential terms and conditions of a loan agreement:
(i) The agreement must state the loan amount, interest, charges, total debt, and repayment terms (either once-off or monthly instalments).
(ii)If the borrower defaults, a Consent to Judgment may be signed—but only after default, not at the time of agreement. This form confirms the borrower owes the lender, allowing the court to issue a judgment. Based on this, the borrower may consent to an Emoluments Attachment Order—a court order instructing their employer to deduct part of their salary to repay the loan.
(iii) A cooling-off period of three business days allows the borrower to cancel the agreement and repay the loan amount (plus interest for only the days the money was used).
(iv) Lenders are not allowed to keep a borrower’s bank card or PIN.
(v) Borrowers may lodge complaints with NAMFISA by completing and submitting a Complaint Intake Form if they are treated unfairly.
(vi) Before finalising the loan, the lender must:
In conclusion:
It is important for a borrower to honour the terms and conditions of the loan agreement. If a borrower is unable to service a loan on the basis as agreed on with the lender, the lender should be contacted immediately and new arrangements made for the repayment of the loan. It is important for the borrower not to remain quiet and hope for the debt to go away; it will not disappear and will only cause bigger problems and expensive legal costs to the borrower in future. Do contact the lender to explain your current difficulties and to make new.
It is important for a borrower to honour the terms and conditions of the loan agreement. If a borrower is unable to service a loan on the basis as agreed on with the lender, the lender should be contacted immediately and new arrangements made for the repayment of the loan. It is important for the borrower not to remain quiet and hope for the debt to go away; it will not disappear and will only cause bigger problems and expensive legal costs to the borrower in future. Do contact the lender to explain your current difficulties and to make new.
