The rapid growth of the credit market means that people get used to living above their means. The real opportunity to instantly use something that isn’t quite affordable and force many to take out loans for huge sums without thinking that sooner or later the money will have to be given.
Often a sudden departure, illness or just irresponsibility prevents the borrower from meeting his loan obligations on time. But such forgetfulness is easy to “treat”. If you pay an impressive late payment penalty a few times, you will most likely establish your financial discipline.
However, it is often much more complicated. With the economic crisis, more and more people are losing their solvency. Whether this is due to job loss or other reasons is not so important.
Loan debt. What to do? Crisis in life and in the wallet
Have you read a loan agreement? You will surely find something there that will definitely require you to tell the bank about changes in your life, be it a change of address, place of work or last name. It particularly affects your solvency. The first thing you have to do is go to the bank.
It is better to do this two or three weeks before the expected debt. Try to negotiate a deferral or change in the payment schedule. This way, you can show the bank that you are also worried about credit debt and find out how to fix the least loss situation for yourself.
Remember that all negotiations with the bank must only be done in writing. You can then prove that you really contacted the institution to solve the problem with the world. In any case, please enclose the documents with the application showing that the reason for which you applied to the bank is indeed valid.
This can be a certificate from the employer stating that your salary has been reduced, a copy of the employment file with a dismissal log, a certificate from the employment office, an extract from the honey. Cards with diagnoses and checks for expensive procedures or medication. Bank employees check and make the appropriate decision.
If you are unable to visit the financial institution in person, send the documents by letter, only by registered mail and with a receipt.
What is the delay?
It can be said that up to a point the bank will even benefit from the “forgetfulness” of customers since you will have to pay a fine for each day the loan is delayed. The amount of the penalty can be 0.01 to 3% per day or it can be expressed in a fixed amount.
There are cases where the bank not only charges interest on the loan itself but also on fines and penalties that were not paid on time. Then the debt increases almost exponentially every day.
In addition, almost every loan agreement contains a clause that allows the bank to unilaterally request the early repayment of the loan for breach of the terms of the contract. Delay in payment is such a violation.
Is it worth hiding?
So you have loan debt. What to do? There are many ways to solve the problem, but what definitely does not need to be done is to hide your financial difficulties from the bank. Do not think that they will forget you and the debt will be canceled. If a financial institution employee doesn’t bother you with calls and letters, the reasons may be different, but forgetfulness is definitely not one of them.
Some banks simply don’t have that many people to respond quickly to the slightest delay, and for some structures, it’s sort of a business, an additional source of income. Because the longer you don’t pay, the more you can ultimately ask for, especially if you have taken out a loan secured by a property.
After you have delayed multiple payments, the bank will blacklist you and your credit history will be damaged. Even if you choose to repay an existing loan, you will have problems getting a new loan.
And if the amount of the loan debt exceeds 1.5 million dollars, the bank can request that you be recognized as a malicious non-payer. In this case, you not only face huge fines, but also a real prison sentence of up to two years.
Let’s make an agreement! restructuring
Accumulated loan debt? First of all, ask the bank employees about the possibility of restructuring. In 90% of cases, they make concessions to their customers who are in a difficult situation.
This is because, by law, a bank has to create a fund out of its own profit that covers outstanding loans. This means that the institute’s net profit decreases and not its assets. Therefore, every bank is keen to make such a fund much less because money should work.
The first thing to do is to write a statement on debt restructuring. After review, the bank will decide what to do next. The best solution for you is to sign a new agreement (or an additional agreement to an existing one) over a longer period while reducing the monthly repayment.
Sometimes, especially if you can prove the jar that your difficulties are temporary, you can be given a vacation credit. This means that the repayment of the principal debt of the loan is suspended and only interest remains to be paid. In this case, fines and penalties are also not charged. Banks can offer this service to borrowers for a period of one week to a few months. If your financial situation does not improve during this time, you have to look for another way out.
Another loan? refinancing
If you have nothing to do with debt restructuring, and it turned out for some reason, the bank declined you, you can try another option – a loan to repay other loans. You can apply for a loan from the same institution or contact another one of your choices.
Such a service can be relevant for mortgages, for example, or if you have multiple loans. In this situation, a loan to repay other loans helps to avoid confusion with payments to different banks.
Eventually, the due dates may not coincide and the risk of an overdue next payment increases many times over. It may be advisable to take out a new loan in an amount sufficient to fully repay all other loans and to carefully monitor the timely performance of its obligations.
You have loan debt: what to do? Find a reliable guarantor. This is another way to solve the problem that the loan officer can offer you. Until you regroup your money and start fully meeting your obligations, the guarantor will act as the guarantor of your solvency. Of course, you have to prove the guarantor’s solvency, you need a full package of documents, usually the same as for the borrower. However, keep in mind that the guarantor bears all responsibility if you still cannot pay with the bank.
There is a hunt: collectors and anti-collectors
If your debts exceed ten dollars and you’re afraid to speak to bank employees, your debts can be transferred to a debt collection agency. Sometimes such structures completely redeem your debts to the bank through a loan, but most collectors use it to outsource.
This means that they each offer a unique service. Communication with such companies is usually much more unpleasant than talking to bank employees. Although they are required to act within the legal framework, this does not always happen in practice.
By law, the collector must first contact you by phone and try to convince them to voluntarily repay the debt. Next is the mailing list. The collector must inform you in writing that the bank has instructed him to collect the current loan debt from you, the amount of the claim and the repayment period.
If you ignored this call, the debt collection agency staff will try to meet you in person. They can come to your home or work. If no measures have resulted in a positive result, the debt collection agency can file a complaint with the court to enforce the debt collection.
In this case, you can try to use anti-collector services. These are such legal organizations, the essence of which is to protect borrowers from collectors or banks. An anti-collector can also help reduce the amount of the fine and achieve a recount of the credit penalty.