The Bank of Ghana has reminded banks and all financial institutions that they are required to disclose all charges and fees to a borrower in a loan agreement.
Failure to disclose this information to the borrower will result in the undisclosed charges and fees being null and void, the regulator said.
In its Financial Literacy Responsible Borrowing, the central bank told borrowers to pay particular attention to the interest rate quoted
“In considering a loan offer, pay particular attention to the interest rate quoted. Look out for the Annual
Percentage Rate (APR), which represents the total cost, including interest on an annual basis and fees and charges to be paid to the lender each year for the loan,” the BoG said.
Always compare the APR of financial institutions in order to decide where to apply for your loan, it further said.
“Take note of all the fees and charges associated with loans, including upfront charges. Your financial service provider is required to fully disclose all fees and charges on the loan to you in the Loan Agreement.
Fees and charges that are not disclosed to the borrower in the loan agreement will be considered null and void. The lender would be required to refund all such fees and charges already paid by the borrower and will be liable for sanctioning by the Bank of Ghana.
“Before accepting the loan product, seek an explanation of the loan terms and conditions from the lender in any language of your choice or from your independent personal financial advisor. This will enable you to gain the needed understanding of the product.”
