Getting credit is serious decision; after certain period of time, part of own income should be paid back to the crediting institution in a form of interest and principal payment.
If you decided to take credit, you have to undertake following steps.
1. Be familiar preliminary with conditions of crediting in different microcrediting companies (MCC). This information is provided both in the MCC offices and formal web-sites.
2. Take information on conditions of credit lending from the credit officers of MCC and be familiar with sample of credit agreement.
3. Draw attention to following conditions:
– annual interest rate for credit use (interest rate in months х 12 months);
– various commission fees for credit service (credit issue, cashing, processing of documents, repayments, transport costs). Such commissions increase cost of the credit;
– method of interest charging. Clarify, do they charge interest on reduced amount of the credit;
– penalties for untimely repayment of the credit.
4. Pay attention to size of effective interest rate on credit.
5. Clarify possibility of pre-term credit repayment: when is possible to repay credit in advance; is there possibility to repay partly credit in advance; is amount of monthly payment or credit period reduced. Please note that forfeit for pre-term repayment of credit is not charged on credits issued after February 2013. Sole condition is that the client should notify the microfinancial institution 30 days prior pre-term payment.
6. Are there procedures in MCC on consideration of client requests (complaints, proposals and other questions). Learn these procedures.
7. The clients can take draft of credit agreement before its signing to look through and/or legal consultation.
Under signing of the agreement
1. Read carefully the credit agreement and all its annexes, look through payment schedule.
2. Clarify all unclear points in the credit agreement and its annexes, ask the MCC’s officer BEFORE you sign the agreement.
3. The client has right to refuse credit after signing of the credit agreement but before money actually received on cash desk.
After getting credit
1. Pay in time according to payment schedule. Even for delay in one day you can be fined.
2. Carefully check receipts from MCC and keep them till full credit repayment.
3. All relations with credit organization should be processed in written form – either request, application and claim or something else.
4. Apply to your credit expert in case any questions occur regarding your liabilities (rest of credit and so on).
5. In case of disputable situations, FIRST OF ALL apply to MCC for clarification according to procedures available in the company.