5 steps to responsible borrowing #bwc2023

In a fast-moving world of infinite opportunities, effective management of personal finances is a key to success. One of the most important decisions that can help you achieve your goals at the right time is taking out a loan. Whether it’s a loan for home improvement, major purchases, business financing, buying a car or a dream home, a loan can be an important “tool” or a “burden”, depending on how you manage it. It’s up to you how you handle this tool!

At Microinvest, autumn is the time when we share tips for smart lending, now in its eighth year, by participating in an international campaign organized by Microfinance Centre – “Borrow Wisely 2023”. This year, the campaign launches in a new, more complex and interactive format, covering important topics such as the steps to getting a responsible loan, women’s involvement in business and the importance of digital technology.

If any of these topics intrigue you, keep an eye on our pages. And now let’s tell you what useful information we prepared for #BWC2023 and how we manage to incorporate responsible lending principles into Microinvest’s work every day.

Responsible lending is a “lifestyle” at Microinvest

Every day we strive to offer loans in accordance with international principles of customer protection, where both parts benefit from working together in a respectful and objective manner. In our 20 years in the financial industry, we have learned that responsible lending means building a relationship between lender and client based on liability and trust.

If you’re planning to get a loan and are feeling distrust, make sure you go through these 5 steps of responsible lending to help you make the right decision.

Check how much you can afford to borrow

The first step to making a smart lending decision is to find out how much you can borrow. Most people undervalue their expenses and overvalue their income, which is wrong. As we are responsible lenders, at Microinvest we take care to explain to our clients how important it is to objectively calculate their ability to repay a loan. In this way, the loan will not become a financial problem over time, but will only benefit you in achieving your goals.

Calculate how much you will pay

To understand what a loan is worth, it’s important to know how the cost of the loan is calculated, the repayment period, and the commissions, additional fees and penalties. All of this makes up the interest rate (EIR) on the loan. This information should not be missing from the contract, and the loan officer must convey and explain it.

Find out if you fully understand the contract

Consciously signing a loan agreement means not only reading it, but also understanding the obligations you have made to the financial organization providing you with the loan. In order to understand all the terms and conditions, you need to know what you should pay attention to when signing such a document. Being a responsible lender, Microinvest considers it its main obligation to explain all the terms and conditions and costs of the loan before signing the contract.

Control debt – don’t let it control you!

The golden rule of smart lending is to respect all the terms and conditions you agreed to when you signed the loan contract. This means not only making a reasonable decision on how you will use the borrowed funds, but also realizing the necessity of repaying them on time. At Microinvest, we focus on responsible lending and building stable relationships with each client.

Check what should you do if you are not satisfied

The success of getting a loan depends on choosing a reliable financial organization, understanding the loan terms and conditions and their compliance by both the client and the lender. Therefore, if you didn’t get a clear answer, faced with uncertainty or are dissatisfied, you can contact a representative of the company to find the right way to solve the problem.

A loan from a responsible lender can only benefit you, the most important thing is to be informed. Control your debt, don’t let it control you!

#Microinvest #BWC2023 #LendResponsonsibly

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Client's Name
Client's Surname
Personal Identity Number
Currency
Term
Rate
Amount
Monthly payment
Amount to receive
Purpose
Comments

1. Name and Contact Information of the Creditor
Creditor
Address
Phone number
Email Address
Web page

3. Costs of the credit
Rates related to the credit
Annual Percentage Rate of Charge (APR) This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers	%
In order to obtain the loan in accordance with the agreed terms and conditions, it is mandatory to conclude an insurance contract to guarantee the loan or a contract for another ancillary service.
Related costs
Any other costs deriving from the credit agreement	Fee for services rendered in relation to usage of credit, calculated and paid as follows: of the credit and paid by the Debtor on the date of granting the credit from own sources or is deducted by the Creditor from the amount of the credit The negotiation / prolongation of the credit can take place by mutual agreement of the parties, by signing an additional agreement, the Creditor being entitled to request an increase in the interest rate within the limits provided by the legislation in force. In case of negotiation / prolongation of the loan, the Borrower shall pay to the Creditor, at the date of the negotiation / prolongation a commission in the amount of 2% from the credit balance at the time of negotiation / prolongation.
Conditions under which the costs related to the credit agreement can be changed	The Sides can change the costs related to the credit by written agreement signed by both parties; For the non-constitution of the guarantees within the agreed term, the Creditor is entitled to calculate, and the Client will pay to the Creditor an Interest of delay in the amount of 5% annually, applied to of the daily balance for each day of delay, starting with the date following the term established for the constitution of the guarantee/ s and until the date of the proper execution of the respective obligation.
Obligation to pay for notarial fees / mortgage registration fees / fees for noting the prohibition of pledge in the Transport Register related to the pledge of means of transport (agricultural machinery)	Paid by the Client , except as otherwise provided in the pledge / mortgage agreement.
The cost for the valuation of real estate proposed in pledge	Paid by the Client directly to the Evaluator
Costs in the case of late payments Missing payments could have severe consequences for you (e.g. forced sale) and make obtaining credit more difficult
The repayment of the loan is free of charge in the secondary offices of the Creditor, as well as at the discretion of the Debtor through the representatives authorized to collect loan payments. The list of which and their fees are published on the website of the Creditor (www.microinvest.md/cum-achiti-creditul/). In case the Debtor use payment methods with fee, the Debtor cover all the costs of repayment of the loan and undertake to make the payments in such a way that the Creditor receives the agreed repayment amount and without any deductions by third parties processing the refund payment.
In accordance with and arising from the provisions of art. 15, para. 7), lit. a) from Law no. 202/2013, any payments related to the granted credit (commissions, taxes, penalties, late interest and any other type of payment), except interest, will be applied and collected within the limit of the ceiling of 0.04% of the total value of the credit per credit day multiplied by the number of days of actual use of the credit (hereinafter 'Ceiling'). Therefore, the Lender will be entitled to apply and collect the costs, excluding interest, exactly in the fixed or percentage amount established in the contract if the said ceiling allows, and if the ceiling is lower than the value of at least one cost, excluding interest, then the Lender will be entitled to reduce the fixed/percentage amount and apply and collect any of the applicable costs only within the limit of the ceiling value. When calculating the ceiling, the costs already applied and collected will be taken into account, with the exception of interest, which reduces its value. (Representative example: if the amount of the penalty is 20 MDL per day, and the ceiling value at that time is 16 MDL, then a maximum of 16 MDL will be collected).

4. Other important legal aspects
Right of withdrawal You have the right to withdraw from the credit agreement within a period of 14 calendar days	Yes
Early repayment You have the right to repay the credit early at any time in full or partially	Yes
The creditor is entitled to compensation in the case of early repayment The Debtor may repay the loan in full or in part in advance, notifying the Creditor in writing 3 days in advance, and paying an early repayment fee of:	% from early repaid amount, if the period of time between the date of early repayment and convened maturity exceeds one year; % from early repaid amount.The early repayment can be made only if the Debtor has no outstanding debts on interest or other amounts to be paid in accordance with the Contract. % from early repaid amount, if the period of time between the date of early repayment and convened maturity does not exceed one year.
Database usage The creditor must inform you immediately and without charge of the result of a consultation of a database, if a credit application is rejected on the basis of such a consultation. This does not apply if the provision of such information is prohibited by law or is contrary to objectives of public policy or public security The parties may agree on additional terms and conditions, which will be included in the credit agreement.	Yes
Right to a draft credit agreement You have the right, upon request, to obtain a copy of the draft credit agreement free of charge. This provision does not apply if the creditor, at the time of the request, is unwilling to proceed to the conclusion of the credit agreement with you	Yes
The period of time during which the creditor is bound by the pre-contractual obligations	This offer is valid for 15 calendar days after it is issued.
In this regard, I subsequently declare that: I was provided with the necessary information, the essential characteristics of the above-mentioned credit product were explained (interest rate, number of commissions, credit costs, early repayment conditions, total amount to be paid), as well as the consequences of non-compliance with contractual clauses; the costs included in the total cost of the loan were explained to me, including the costs for ancillary services related to the credit agreement; I was offered the possibility to negotiate individually the contractual clauses in the credit agreement that I intend to sign, I negotiated individually the granting commission, the monthly commission, the amount of penalties and I mention that its clauses do not disadvantage me, being fair in the report mine with the creditor; I was asked by the creditor about the probable importance of the information provided and whether essential circumstances that I expected to be provided were not omitted in order to make an informed and rational decision about concluding the potential credit agreement. the information provided and the corresponding explanations allowed me to assess, including the personal analysis of other offers of third party creditors, whether the proposed credit agreement is tailored to my needs and financial situation; I know the content of the contract and all its conditions have been explained to me, I have understood and accepted them, and the documents and information underlying the conclusion of the contract are complete and accurate; I know the law, the normative acts that will govern the contract, as well as the lack of consumer quality; I have no ambiguities or misunderstandings regarding the terms of the contract; the credit product corresponds to the purpose described above and will be used according to the destination and the economic activity carried out. The assets procured/resulted/constructed/repaired from received loan sources will be registered/transmitted in the social capital of the company where my business activity is carried out and/or will be used jointly by the members or individually however strictly for running my business activity. (Signature)

5 steps to responsible borrowing #bwc2023

Responsible lending is a “lifestyle” at Microinvest

Check how much you can afford to borrow

Calculate how much you will pay

Find out if you fully understand the contract

Control debt – don’t let it control you!

Check what should you do if you are not satisfied

Other news