Borrowers Advice

E C Legal will advise borrowers and guarantors on the nature and effect of proposed loan documentation including obligations under the loan agreement and the likely consequences should the loan go bad for any reason.

Once we have given you the advice, we will sign a Solicitors Certificate or other documents that are required by the lender to complete the loan transaction – provided, of course, that what we are required to certify is true.

Read through to the end of this web page and follow the instructions given. This will start the process without obligation on you to continue.

If you have any enquiries regarding a borrowers advice, please contact Kyle Ogden.

LIMITS ON OUR ADVICE

It is important to understand what E C Legal is able to do.

E C Legal can:

• advise you on what a loan agreement, mortgage and the associated documents mean;
• what may happen if you default in payment under the loan agreement;
• certify your identity provided you have the appropriate documents (see below)

E C Legal can’t:

• give you financial advice. You need to decide whether you can afford the loan and whether the interest rate and other charges are acceptable, We can help you understand the effect of the loan but not if it is the right financial decision for you;
• change the terms of the loan. If you don’t like what we tell you about the nature and effect of the proposed loan documentation, it is possible for E C Legal to attempt to negotiate changes at an additional cost but these terms are usually fixed by the lender and highly unlikely to be changed. In practical terms, if you don’t like our advice, you should not proceed with the loan.

GENERAL INFORMATION ABOUT LOANS

Legal Jargon

Most loan agreements and associated documents contain specialised legal terms. Part of our job is to explain what these mean but here are a few common ones:

Loan Agreement

The loan agreement is the main document setting out the deal between the borrower and the lender. Sometimes this is set out as a formal loan agreement but is often done in a letter or memorandum format. The amount of the loan, the term of the loan, the interest rate and what happens on default should all be included in the loan agreement.

Whatever format is used, the loan agreement is a contract between the borrower and the lender for the provision of the loan funds.

The loan agreement will usually require the borrower to provide security.

Security

Almost all loans are backed by some form of security and often more than one kind. A security is something that can be used to repay the amounts owing if the borrower defaults under the loan agreement. Securities come in many forms and include:

• Mortgage
  A mortgage is a special type of charge usually over real estate. A mortgage gives the lender a power to sell the secured property in the event of default under the loan agreement. The lender can obtain an order from the court to send a court officer to repossess the property. This property will then be sold and the proceeds from the sale used to pay the amounts owing. If this is your family home, and you default under the loan agreement, you may very well end up homeless;
• Charge
  Put simply this ‘charges’ all of the assets of that person or company with the repayment of the debt. Charges are often registered on a national registry and can potentially effect your ability to enter into further loans or other arrangements whilst they are in place. One of the main differences between a mortgage and a charge is that a mortgage allows the lender to take possession of the property in the event of default and sell it whereas a charge usually does not allow this;
• Guarantee
  A guarantee is a promise made by someone who is generally not a party to the loan to repay the amount owing if the borrower is unable to. Guarantees are required by lenders where there may be some doubt about the ability of a guarantor to pay. The person giving the guarantee is called a guarantor. Guarantees are often required when a company is the borrower.

GENERAL ADVICE ABOUT LOANS

Before anyone signs a loan agreement, they need to:

1. understand the amount being borrowed – lenders may interest, lending charges or other amounts from the amount borrowed so that the amount received by the borrower is less than the amount borrowed;
2. understand the interest rate being charged and when and how interest is to be paid. Part of this process involves making sure that the borrower can pay the interest as and when it falls due;
3. understand what happens if there is a default.
4. have a workable plan for repayment of the loan.

GENERAL ADVICE ABOUT GUARANTEES

A guarantee is not something to be given without serious consideration of all of the facts surrounding the loan. A guarantor should view the situation as if the guarantor was borrowing the money personally.

You need to understand that if for any reason, the borrower defaults under the loan, or is for some other reason unable to repay the amounts borrowed, you will be responsible for meeting their obligations. Any assets you personally own, any real estate, and any other specific assets that you have given as security may be seized and sold to meet the outstanding amounts under the loan; this will likely include not just the advance, but also any unpaid interest and legal fees.

BEFORE YOU SEE US

Here is what you need to do before you come to see us:

1. have all of the loan documentation and correspondence sent to our offices in advance. It is important that we have time to read this so that we can give you the correct advice. We prefer that the loan documentation comes to us and you both as PDF files and in hard copy but if the lender or their solicitor wants to send us just the hard copy documents for signing, this is okay;
2. read the loan document as best you can. It can be complicated but make notes on any specific items that you don’t understand;
3. anyone who is going to sign documents needs to bring identification documents as follows:

   Australian Passport or foreign passport
   plus Australian drivers licence or Photo Card

   or

   Australian Passport or foreign passport
   plus full birth certificate or citizenship certificate or descent certificate
   plus Medicare or Centrelink or Department of Veterans’ Affairs card

   or

   Australian drivers licence or Photo Card
   plus full birth certificate or citizenship certificate or descent certificate
   plus Medicare or Centrelink or Department of Veterans’ Affairs card

   Bringing copies of the above documentation is not enough. You need to bring the original documents.

   If you do not have the above documentation please let us know in advance so that we can make alternate arrangements.

4. before you come, make sure we have a hard copy set of all documents to be reviewed and/or signed. It really helps us if the lender or their solicitor marks each spot where a signature is required on the documents with stick-on tags so that we can ensure that the documents are executed to their specifications on the first attempt.It is not unusual for a number of signatures to be required and it’s relatively easy to miss one of the signatures which means you would need to come back to us.
5. understand our fees as set out in the table below;
6. allow about 45 – 60 mins for the consultation.

FEES

The fees below are inclusive of GST. Where there is more than one borrower or guarantor, the legal fees cover the number of borrowers shown.

Fees below must be paid in our trust account at least 48 hours before the consultation. When you click the Ready to Proceed button below, the payment options will be shown.

We can make arrangements for fees to be paid later e.g. on settlement of the loan but this adds time and cost – allow about $200 to $300 extra. We will confirm this in writing once we know how you would like to handle the payment arrangements.

The consultations occur at our office in the Melbourne CBD. We can arrange to come to you for an additional cost.

The fees below assume that all parties speak English as a first language. Where we have any doubt about this, we will arrange for an independent, accredited interpreter to attend – allow about $200 for this.

Click here to give us the details of your loan
and make a booking to see us.