Have you ever been in the middle of taking out a loan for a mortgage, car loan, credit card, or anything else and felt like you were drowning in paperwork and legal jargon?
Have you ever sat across from a loan officer telling you about insurance or warranties or other things that sound very complicated and you feel pressured to make an uninformed decision?
If you’ve never had that feeling then you’re either lucky or you’re very good at reading contracts. Unfortunately there are not a lot of people who understand contracts or have access to a personal lawyer to review things like this. It’s up to you as a consumer to understand what you’re getting into. And how do you do that?
If you are getting a loan and you don’t understand something, ask for clarification. If you still don’t get it, ask again. Ask to talk to someone else if you can’t understand it, and don’t move on until you know exactly what you’re getting into.
In the UK, there are a lot of people who were sold PPI, or Payment Protection Insurance, who didn’t really need it. Some people were misled to believe it was mandatory, and others may have had the policies added to their loan without their knowledge. These people were cheated out of money and now have to go through a painful process to reclaim PPI premiums they shouldn’t have been paying in the first place.
Talk to a Lawyer or Walk Away
If you’ve reviewed a contract and asked multiple questions, but you still don’t understand what they want you to sign then the best thing to do is to walk away and talk to a lawyer.
Most of us are not legal experts and it’s important to understand that. It’s good to do research on a particular subject, but most of the advice you’ll find online comes from people who also aren’t lawyers.
If you are truly concerned about getting ripped off then you should either talk to a lawyer or just walk away from the transaction entirely. A lawyer can give you appropriate advice and help avoid signing a bad contract, but it will cost you for his or her expertise. If you really don’t trust the contract, the salesperson, or both, then your best course of action might be to walk away.
Don’t sign something you don’t understand. Ask questions, talk to a lawyer, and if necessary just walk away.