When you borrow money you must read the fine print!
We have all heard it so many times “read the fine print when you sign an agreement to borrow money”! It bores us when we are constantly told the read everything including the print we need a magnifying glass to see. It seems boring, that is, until we find ourselves in a bind because we didn’t read the fine print. Whenever you borrow money you should be asked by the financial institution or the person you are borrowing money from to sign a credit agreement. The credit agreement is a legal document which must set out the conditions both sides are agreeing to. The conditions in the agreement must include how the money you are planning to borrow must be paid back to the lender.
There are many reasons to borrow money and it is difficult to imagine a world where we wouldn’t need to borrow money. How would most of us manage to buy a home or a car if we were not able to borrow money? Loans help the financial world turn and they are extremely useful. There are also many ways to borrow money; we can get payday loans, we can use credit cards, the bank can lend money to us and other financial institutions can lend us money. If you need to borrow money for any reason, make sure that you understand what you are signing. Know how much interest you will pay over the duration of the loan.
If you are being chased to pay back borrowed money you must check that you are the person who is responsible for the debt before you agree to pay it back. It may be that you end up paying back someone else’s loan and wouldn’t that be a sad story!
In order for you to be responsible for paying back a debt you must have signed a credit agreement. Before you agree to pay back any loan, take a look at the original credit agreement to make sure that it has your signature on it. Check the agreement to see what you agreed to and to check if anyone else also took out the credit with you because if they did they will also be responsible.
I could be possible that you may NOT be responsible for paying back the debt IF:
- You did not sign the credit agreement being presented to you by the lender
- Someone else used your name to get credit for themselves (this happens!)
- You are being asked to pay back a debt taken out by someone else with the same name as you (this happens too; the lender may have tracked down the wrong person)
- You are being asked to pay back a debt which your partner took out in their own name only.
There may be other reasons why you might not have to pay back money you are being asked to pay back. To find out more about these, see How to dispute a debt.
You could be responsible for paying back the debt if:
- You signed the credit agreement as a guarantor
- You signed jointly with someone else
- You are a catalogue agent
For more information visit http://www.adviceguide.org.uk