Today, people take loans as a treadmill, and it is no wonder that there are more and more of those who are unable to pay their obligations properly. Have you been late in payments? What usually happens when someone cannot repay a loan?
Banks and non-banking companies tend to be client-friendly for a certain period of time and can be agreed with them on a new payment schedule.
But it is necessary to communicate and express the will to solve the situation. But if nothing helps, the creditors harden. The procedure depends on how much the client owes and how he will deal with his commitment.
Has the regular repayment date expired and you did not pay? The creditor company wakes up, but you still have a few days to redress. If you do not use them, you will be sent to the reminder procedure. You will be prompted by the lender to pay and you will be subject to contractual penalties. This takes approximately three months.
The creditor will remind you by phone, email, SMS and mail. Usually the company sends three reminders. The last one is a warning call for payment of the amount due.
The pursuit of a viable solution
The creditor’s steps depend a lot on the client’s approach, whether he is making a “dead beetle” or cooperating, and he is trying to solve the situation.
The lender is wondering why you are in a situation where you are unable to meet your obligations and are trying to agree a viable solution. These could be a repayment schedule and loan consolidation.
From agreement to court proceedings
Usually, as soon as the client does not respond to the reminders sent, owes three installments and is not willing to agree on another method of repayment, the creditor proceeds to redeem the loan balance plus interest and fees.
But he is still trying to agree with the debtor. The ultimate solution to recover debt is court proceedings. In a certain percentage of cases, civil, execution or insolvency proceedings are taken.
Recovery by external companies
Another solution may be the management and recovery of claims by external companies. The bank or non-bank company hands over the matter to the collection agency, which then collects the claims. Certain banks and large non-banking forms recover secured and high claims, mainly through their regional staff.
Communication with the lender
What to say at the end? If you have problems with repayment, contact the creditor as soon as possible, inform him about your situation and try to find a solution ─ mostly it is a repayment schedule adjustment. Sweeping the problem under the table will only delay the solution and make the situation worse.