A checklist to work through before you borrow

Six things to settle before you borrow

Six things, in this order: the need, the next income date, the full price, the lender, the agreement and the plan if circumstances change. The whole list takes about ten minutes. You can price the loan first and work through the rest below.

1. Name the need

Write down the essential expense and the smallest amount that covers it. Consider whether a payment arrangement with the supplier, or another available option, could deal with it without new credit.

2. Check the next income date

Use income you can reasonably expect. After essential costs and existing debts, how much is left? Include irregular bills that fall due before the loan is repaid.

3. Write down the full price

• Amount actually paid to you.
• Interest and all fees, with VAT where applicable.
• Any insurance and whether it is required.
• The total repayment and exact date.
• What happens if a payment is missed.

4. Verify the lender and payment route

Match the lender to the NCR register of credit providers and check the contact details independently. Do not pay an advance “release fee” or give a support agent your bank password, PIN or OTP. The scam guide lists the other warning signs.

5. Read the quotation and agreement

Check that the amount, dates and charges match what you expect, and ask about anything unclear. Keep a copy you can read later. Do not sign on the assumption that the loan can be extended automatically. The quotation guide goes item by item.

6. Know the plan if circumstances change

Find the creditor’s repayment-support and complaints contacts before you need them. If your plan already depends on another loan, pause and review it — the responsible-borrowing guide explains why.

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