Finally qualified to apply for a student loan? The next step you’re probably thinking of is applying and signing the contract. Well, you’re not totally wrong. However, you should not sign that agreement without reading it thoroughly first! Even if you’re transacting with a reputable lender, mahalaga pa ring suyurin ang kontratang ibibigay sa‘yo. Make reading a habit, ika nga.
Student loan contracts are legally binding agreements between the lender and the borrower. Nakalagay dito ang total loan amount, interest rate, deadlines at iba pang terms na susundin ng lender at borrower. Here is a peek at the contents of a student loan contract that you should know about.
It goes without saying that there are requirements when applying for student loans. The borrower’s name, contact information, and ID photo are important details that will appear in the contract. Sometimes, even school information is included depending on the lender.
Some lenders require student loan borrowers to have a co-borrower. Especially if the borrower is unemployed, having a co-borrower is needed to make sure that the loan will be repaid consistently. The co-borrower’s name and contact information shall appear in the contract as well.
The main function of a student loan contract is to protect both the lender and the borrower. The agreement makes everything transparent to avoid misunderstandings and hidden fees that will burden both parties. A student loan contract should have the following details:
- Principal loan amount - The amount borrowed which could be equal to or less than the tuition fee of the student borrower.
- Repayment deadlines - Ang pinagkasunduang araw ng pagbabayad sa loan. The first, monthly, and last payment dates should be stated on the contract.
- Installment value - The amount that the borrower has to pay to the lender every month.
- Agreement number - Also known as loan reference number present on your payment form.
- Payment options - Specifies where you can send your payment, such as GCash, bank transfer, Bayad Centers, and more.
- Disclosure statement - For transparency, dapat nakasaad sa fine print kung mayroon pang ibang babayaran gaya ng origination at late fees.
Terms and Conditions
This is what makes a contract long, kaya kadalasang hindi na binabasa. However, it’s important for the borrower and co-borrower to read the T&Cs first before signing the agreement. It is your duty to know your rights and obligations as a borrower. Also, this section also lets you know about the lender’s responsibilities. If you can consult a law professional, it’s better to have them take a look at these provisions to ensure that everything is fair and legal.
Student loan contracts exist to help make everything clear between the borrower and lender. It clarifies what you are getting into, the responsibilities to uphold, and how long the transaction is going to last. To ensure a smooth-sailing relationship during the contract, make sure to read and understand everything in the loan agreement.
With Bukas, you don’t have to worry about shady transactions and unfair contracts. Avail of our tuition installment plan and study without financial worries today!
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Written by: Ronadine Amata