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Borrowers are advised not to rush to acquire loans – BoG

Borrowers are advised not to rush to acquire loans – BoG

The Bank of Ghana (BoG) has announced to the general public some key issues with regard to loan acquisition and repayment responsibilities and obligations of customers of banks and specialized deposit-taking institutions.

The Bank said there was a need for persons to critically assess their loan repayment capabilities prior to obtaining a loan facility.

“Borrowers are advised not to rush to acquire loans. Where possible, they may obtain and compare offers from multiple lenders before deciding on the best deal.

“Prior to the signing of a Loan Agreement, lenders are required to give potential borrowers a ‘Pre-agreement Truth’ in Lending statement (similar to proforma invoice), that summarizes the terms and conditions associated with the loan.”

In taking the decision to accept a loan offer, customers should look out for interest rate which in this case should be the Annual Percentage Rate (APR), which represents the total cost to be paid to the lender each year for the loan, expressed as a percentage.

“Note that the APR provides a broader measure of the cost that a borrower pays for taking a loan. The APR reflects not only the interest rate but also the other fees and charges that borrowers have to pay for the loan,” the Central Bank said.

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