With relation to the loan acquisition and repayment obligations and responsibilities of bank and specialised deposit-taking institution clients, the Bank of Ghana (BoG) has made some important announcements to the general public.
Before getting a lending facility, individuals, according to the Bank, must rigorously evaluate their ability to repay their debts.
“Loans should not be obtained quickly, borrowers are warned. They might gather and evaluate bids from many lenders before choosing on the best offer, if that is a possibility.
“Lenders are expected to provide prospective borrowers with a “Pre-agreement Truth” in Lending statement (similar to a proforma invoice), that explains the terms and conditions associated with the loan, prior to the signing of a Loan Agreement.”
Customers should consider the interest rate when deciding whether or not to accept a loan offer. In this situation, the annual percentage rate (APR), which indicates the total cost to be paid to the lender each year for the loan and is expressed as a percentage, should be taken into consideration.
It should be noted that the APR gives a more comprehensive picture of the cost a borrower incurs while taking out a loan. The APR includes not just the interest rate but also any extra costs associated with the loan, according to the Central Bank.