Contract >> Back to glossary
Most often if you are looking to borrow money you will be expected to enter into some type of contract, which will cover all of the terms expected by both you as the borrower, and the lender of the money. In some cases it does not even have to be a formal written contract but can be a verbal one. When it comes to borrowing money off financial institutions though, it usually is a formal contract in writing.
If you currently have debtors then most likely you have a specific contract that you have entered into with each of these. Contrary to the belief of many borrowers all financial contracts are not the same. Individuals who believe they are the same, often don't bother to read the contracts they are signing, and this can be a dangerous thing to do as once they are signed they are legally binding.
The crux of the contract usually consists of the amount of actual money being borrowed which is the principal. Then added to this will be the percentage of interest that is being charged. Many times there will be a payment sheet attached to the contract that shows the payment schedule, and how much combined principal and interest is being paid with each payment. It should also indicate the duration of the loan and when the first and last payment will take place as well as the terms for each payment, in respect to times. They may indicate specific dates for each payment as well.
The contract will also include all of the options that the creditor may enforce if you do not honour the contract. Many times this used to be referred to as the fine print.
Contracts are usually long and cumbersome and full of legal jargon. Technically borrowers are most often advised to have the contract reviewed by their legal counsel, but in most cases as said, many borrowers don't even bother to read the contract let alone seek out legal advice.
These contracts are held up by law and you as the borrower will have to abide by the terms. Stating that you did not read or understand the contract will not usually stand up in legal actions if you do not honour your end of the bargain.
When you have filled out the request form here at debtcafe.com you will be starting yourself on a road to debt freedom. Any contracts that you have entered into will be reviewed by the professionals who would be putting your debt relief program into place if it is your decision to proceed with a debt solution specifically geared towards your debt problem.
