{"id":1317,"date":"2017-03-29T12:07:07","date_gmt":"2017-03-29T10:07:07","guid":{"rendered":"https:\/\/www.namfisa.com.na\/educates\/?p=1317"},"modified":"2025-07-17T11:14:00","modified_gmt":"2025-07-17T09:14:00","slug":"essential-terms-and-conditions-of-a-loan-agreement","status":"publish","type":"post","link":"https:\/\/www.namfisa.com.na\/educates\/essential-terms-and-conditions-of-a-loan-agreement\/","title":{"rendered":"Essential Terms & Conditions of a Loan Agreement"},"content":{"rendered":"\t\t
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<\/h3><\/span><\/div>
loan agreement is a document\nin which a lender sets out the\nterms and conditions under\nwhich it is pr epared to make a loan\navailable to a borr ower.\nThe main purpose of the loan agreement is to define\nwhat the parties involved are agreeing to, what responsibilities\neach party has and for how long the loan\nagreement will last.\n

\nHerewith an explanation of the essential terms and\nconditions of a loan agreement:\n
\n(i) A loan agreement must indicate the amount\nof the loan, the amount of interest and other charges\nadded to the loan, which will make up the total debt.\nThe loan agreement should stipulate how the amount\nshould be repaid, i.e. once-off in one amount or in\nequal monthly instalments if the loan is serviced over\nan agreed number of months.\n

\n(ii)If the loan is paid off late, the loan is considered\nin default. In such circumstances a lender may require\na borrower to sign a written Consent to Judgment. In\nthis regard it is important for borrowers to know that it\nis illegal for such forms to be signed by a borrower at\nthe time of entering into the loan agreement. It therefore\nfollows that the signing of consent to judgment\nor consent to an emoluments attachment order prior to\nthe borrower defaulting should stop it.\nA Consent to Judgment form is signed by the\nborrower whereby the borrower agrees that he or she\nis indebted to the lender. The Court will then issue a\njudgment on the basis as agreed on by the lender and\nthe borrower. Once the Court gives the Judgment, the\nborrower can sign a written consent to an Emoluments\nAttachment Order.\nAn Emoluments Attachment Order is a court order\nwhereby the judgment creditor (lender) is able to\nattach part of the salary of the judgment debtor (borrower).\nOnce an Emoluments Attachment Order has\nbeen granted, the employer of the judgment debtor\nis obliged to pay a certain portion of the judgment\ndebtor\u2019s salary to the judgment creditor.\n

\n(iii) Cooling-off period allows the borrower to\nterminate the loan agreement within a period of three\n(3) business days after the signing of the agreement\nand, if the loan amount has been paid out, simultaneously\nto repay the loan amount received, to the lender.\nIf the borrower terminates the loan agreement within\nthe cooling-off period, the borrower is only obliged to\nrepay the interest for the number of days that the loan\nwas availed of and not interest for the full period of\nthe loan agreeme\n

\n(iv) A micro lender may not retain the Bank Card\nand Personal Identification Number (PIN) of a borrower\nin respect of a loan availed of.\n

\n(v) The lender must, before the conclusion of a\nmicro loan agreement \u2013\n
(a)Explain to the borrower in a language which the\nborrower understands (if necessary with the assistance\nof an interpreter) the essential terms of the loan\nagreement so as to ensure that the meaning and consequences\nof the agreement are understood;\n
(b)Allow the borrower an opportunity to read the\nagreement, or have it read to the borrower in the case\nwhere the borrower is illiterate; and\n
(c)Provide the borrower with a copy of the signed\nloan agreement before or at the time of advancing the\nloan amount and, if applicable, a copy of the insurance\ncontract pertaining to the loan transaction.\n

\n(vi) A borrower has the right to lodge a complaint\nwith NAMFISA if a lender has treated him or her unfairly.\nA Complaint Intake Form should be completed\nby the borrower and submitted to NAMFISA for\nfurther investigation.\nIn conclusion:\nIt is important for a borrower to honour the terms and\nconditions of the loan agreement. If a borrower is\nunable to service a loan on the basis as agreed on with\nthe lender, the lender should be contacted immediately\nand new arrangements made for the repayment of the\nloan. It is important for the borrower not to remain\nquiet and hope for the debt to go away; it will not\ndisappear and will only cause bigger problems and\nexpensive legal costs to the borrower in future. Do\ncontact the lender to explain your current difficulties, and negotiate new repayment terms that you can afford. Open communication is always better than avoidance and can help protect your financial future. <\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Fair Lending Requirements<\/h3><\/span><\/div>
a lender is required to:<\/span><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • <\/span>Explain the loan terms in a language the borrower understands.<\/li>
  • <\/span>Allow the borrower to read or hear the agreement if illiterate.<\/li>
  • <\/span>Provide a signed copy of the loan and, if applicable, the insurance contract.<\/li><\/ul><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    <\/h3><\/span><\/div>
    In conclusion:\n

    \nIt is important for a borrower to honour the terms and\nconditions of the loan agreement. If a borrower is\nunable to service a loan on the basis as agreed on with\nthe lender, the lender should be contacted immediately\nand new arrangements made for the repayment of the\nloan. It is important for the borrower not to remain\nquiet and hope for the debt to go away; it will not\ndisappear and will only cause bigger problems and\nexpensive legal costs to the borrower in future. Do\ncontact the lender to explain your current difficulties\nand to make new.<\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

    loan agreement is a document in which a lender sets out the terms and conditions under which it is pr epared to make a loan available to a borr ower.<\/p>\n","protected":false},"author":1,"featured_media":1318,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"footnotes":""},"categories":[430],"tags":[],"class_list":["post-1317","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-micro-lending-credit-agreement"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/comments?post=1317"}],"version-history":[{"count":7,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1317\/revisions"}],"predecessor-version":[{"id":35534,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/1317\/revisions\/35534"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media\/1318"}],"wp:attachment":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media?parent=1317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/categories?post=1317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/tags?post=1317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}