TERMS AND CONDITIONS FOR ITEM-BACKED LOAN

1. Purpose of the Agreement

These Terms and Conditions govern the loan facility provided by the Lender to the Borrower against an item or items deposited, pledged, or otherwise provided as security for the loan. By accepting the loan, the Borrower confirms that they have read, understood, and agreed to be bound by these Terms and Conditions.

The item provided as security shall remain in the custody of the Lender for the duration of the loan, subject to the terms of this Agreement and applicable law. The Lender shall have the right to retain the item until the Borrower has fully settled the outstanding loan amount, interest, and any other lawful charges due under this Agreement.

2. Loan Amount

The Lender shall advance to the Borrower the amount stated in the loan record, receipt, agreement, or other documentation issued at the time of the transaction.

The Borrower acknowledges that the loan amount, applicable interest, repayment period, and details of the item securing the loan have been disclosed before the loan is accepted.

The Borrower shall be responsible for repaying the principal loan amount together with interest and any other charges expressly agreed upon in writing.

3. Security Item

The item deposited as security shall be accurately described in the loan documentation, including, where applicable, its make, model, serial number, identification number, colour, condition, and any other identifying characteristics.

The Borrower warrants that:

The Borrower is the lawful owner of the item or is otherwise legally entitled to pledge it as security.

The item is not stolen, unlawfully obtained, subject to another person's security interest, or otherwise encumbered unless disclosed to and accepted by the Lender.

All information supplied to the Lender concerning the item is true and accurate.

The Lender may retain reasonable records, photographs, identification details, or other evidence relating to the item for purposes of identification and enforcement of the loan.

4. Interest and Repayment

Interest shall accrue at the rate agreed upon at the commencement of the loan and shall be payable according to the repayment schedule communicated to the Borrower.

The Borrower may repay the principal and applicable interest in accordance with the agreed repayment schedule. Unless otherwise agreed in writing, payment of interest alone shall not reduce the outstanding principal amount.

A payment shall be considered made only when received and acknowledged by the Lender or through an approved payment method.

5. Default

The Borrower shall be considered to be in default where the Borrower fails to pay the amount due on the agreed payment date, subject to any applicable grace period provided by law or in this Agreement.

Default may include:

failure to pay interest when due;

failure to repay the principal when due;

providing false or misleading information concerning the Borrower or security item;

attempting to interfere unlawfully with the Lender's rights over the security item; or

any other material breach of this Agreement.

6. Three Consecutive Interest-Only Periods

The Lender may, at its discretion, permit the Borrower to remain in default of principal repayment while continuing to pay the agreed interest.

However, this concession shall be limited to three (3) consecutive repayment periods.

During these three periods, the Borrower may pay the applicable interest without being required to immediately repay the principal, provided the Lender accepts such payments.

Payment of interest during these periods does not constitute repayment, waiver, cancellation, or reduction of the principal debt.

Once the Borrower has reached the maximum of three consecutive interest-only periods, no further interest-only period shall be permitted unless the Lender expressly agrees otherwise in writing.

7. Final Default and Sale of the Security Item

If, after the expiry of the permitted three consecutive interest-only periods, the Borrower has not settled the outstanding principal or otherwise regularised the loan as agreed, the Lender may commence enforcement proceedings in accordance with this Agreement and applicable law.

Where the Borrower remains in default, the Lender may, subject to any legally required notices, waiting periods, consents, or court processes, sell or otherwise dispose of the security item to recover the outstanding loan amount.

In addition, where the Borrower fails to cure a default within twenty-one (21) days after receiving a valid default notice, the Lender may proceed with enforcement and sale of the security item, subject to applicable law.

The 21-day period shall be treated as a contractual cure period and shall not be interpreted as removing any longer notice period or procedural requirement imposed by applicable law.

8. Notice of Intended Sale

Before selling the security item, the Lender shall provide the Borrower with notice of the intended sale where such notice is required by law or this Agreement.

The notice may state:

the identity of the Borrower;

the description of the security item;

the outstanding principal and interest;

any applicable lawful enforcement costs;

the reason for the intended sale;

the proposed method of sale; and

the date on or after which the item may be sold.

The Borrower shall have the opportunity, where required by law, to settle the outstanding amount before the sale takes place.

9. Method of Sale

The Lender may sell the security item by a commercially reasonable method permitted by applicable law, which may include private sale, public auction, or another lawful method.

The Lender shall take reasonable steps to obtain a fair and commercially reasonable value for the item, taking into account its condition, market demand, age, depreciation, and other relevant circumstances.

The Lender shall not be required to obtain the original purchase price of the item or the amount the Borrower believes the item is worth.

10. Application of Sale Proceeds

Money received from the sale of the security item shall be applied in accordance with applicable law and the terms of the security arrangement.

Unless the law requires a different order, sale proceeds may first be applied toward reasonable costs associated with lawful repossession, custody, preparation, advertising, valuation, sale, and disposal of the item, followed by the outstanding secured loan obligations.

If the sale proceeds exceed the amount legally due to the Lender and applicable enforcement costs, any surplus shall be dealt with in accordance with applicable law.

Where the sale proceeds are insufficient to satisfy the outstanding amount, the Borrower shall remain liable for any legally recoverable balance, unless applicable law or the written loan agreement provides otherwise.

11. Redemption Before Sale

Before the security item is sold, the Borrower may settle the outstanding amount required to cure the default, together with any lawful costs and charges, subject to applicable law.

Upon receipt of the required amount, the Lender shall release the security item to the Borrower, provided there are no other lawful grounds for retaining it.

12. Care and Custody of the Item

The Lender shall exercise reasonable care in keeping the security item while it is in the Lender's possession.

The Borrower acknowledges that ordinary deterioration, depreciation, or changes in market value may occur and shall not automatically constitute a breach by the Lender.

13. Borrower's Responsibility

The Borrower remains responsible for all obligations under this Agreement until the loan is fully settled or otherwise discharged.

The Borrower shall not attempt to recover, remove, sell, transfer, damage, conceal, or interfere with the security item while it is lawfully held by the Lender.

14. No Waiver

Any temporary acceptance of a late payment, interest-only payment, partial payment, or failure by the Lender to immediately enforce any right shall not constitute a permanent waiver of the Lender's rights.

Any variation, extension, restructuring, or additional grace period should preferably be confirmed in writing.

15. Compliance With Applicable Law

Nothing in these Terms and Conditions shall be interpreted as permitting the Lender to exercise a right that is prohibited by applicable law.

Where legislation requires registration of a security interest, a specific form of notice, a minimum waiting period, court approval, auction procedures, consumer protection measures, or any other enforcement procedure, the Lender shall comply with those requirements.

16. Disputes

The Borrower and Lender shall first attempt to resolve any dispute arising from this Agreement through good-faith discussion.

If the dispute cannot be resolved amicably, either party may pursue the remedies available under the applicable laws and jurisdiction governing this Agreement.

17. Acknowledgement and Consent

By signing below, the Borrower confirms that:

The loan amount and interest have been explained.

The security item has been identified and recorded.

The Borrower understands that interest-only payments do not reduce the principal.

The Borrower understands that interest-only payments may be accepted for a maximum of three consecutive periods unless the Lender agrees otherwise in writing.

The Borrower understands that continued default may result in the security item being sold after the applicable 21-day cure period and any other legally required notice or procedure.

The Borrower understands that sale proceeds will be applied toward the outstanding obligations in accordance with applicable law.

The Borrower has had an opportunity to ask questions and accepts these Terms and Conditions.