The Saudi Central Bank (SAMA) regulates credit transactions between financial institutions and individuals. This is done through a set of rules and regulations that guarantee transparency and ensure full disclosure in credit and personal finance deals and transactions.
Before the customer signs an agreement to obtain any type of finance, he must read and understand the contractual terms, which should be drafted in a professional and clear manner to safeguard the rights of both parties.
For a finance agreement to be fair and transparent, it must meet clearly mention the following:
- The names and details of the parties involved who will provide the funding.
- The rights and obligations of both the finance provider and the client.
- The fees and costs associated with the provision of the finance or credit.
- The fines and penalties resulting from any part of the contract being violated.
- Procedures for settling any disputes between the parties.
7 Tips to Follow When Signing a Finance Contract
- Read and understand the terms and conditions
Some people skip reading the terms and conditions of the contract or fail to read the whole contract. This may have an adverse effect on their finances or even make them legally accountable as a result of lack of knowledge or understanding of their rights and obligations as set out in the contract.SAMA guarantees the right of the customers to ask and enquire should they need further explanation or clarification in order to understand each part and article of the contract. The bank is obliged to explain fully and clearly to the client the terms and details of the contract.
- Make sure that the main information in the contract is correct
Make sure your main details, such as the mailing address and contact numbers mentioned in the contract are correct, to ensure smooth communication between all concerned parties when needed.
Any data-related errors after signing the contract may delay communication between the parties and could pose a confidentiality risk, as some bank letters could be mailed to the wrong address.
- Do not sign incomplete forms or contracts
You must make sure that the contract is completed and there are no pages missing. You can do this by carefully checking the page numbers. Also, make sure to fill out all the required fields, and not to sign blank or incomplete forms. This will help avoid any changes or modification of the information you provided without your knowledge, which makes you financially and legally liable.
- Make sure you get a copy of the contract
After checking that all the dates are correct and all required signatures are in place, remember to obtain a copy of the contract and any other documentation pertaining to the product you have obtained. In addition, you must read and be familiar with the rules and regulations governing the financing process by the institution providing you the finance.
- Obtain details of finance period and amount of repayments
The contract must specify all the details about the finance arrangement – The amount of finance that you will receive, the length (term) of the repayment plan, the amount of each instalment, as well as the date when they will fall due. The contract should also include the costs associated with obtaining the finance as well as management fees.
- Get professional advice
Professional advice should be obtained regarding the rules and regulations that will govern the finance contract. The client will also have the right to object any article or part of the contract that is deemed unfavourable.
- Know your rights
If you suffer any damages as a result of the finance contract between you and the bank or finance company, whether it is a partial or full breach of the contract, you should submit your complaint to the bank’s complaints department.
If you receive an unsatisfactory response, you must then submit your complaint to SAMA’s Customer Protection Department through SAMACares website.
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