What are the consequences of not paying back the loan on time?

22 Sep

Poles are more and more willing to reach for cash loans in the non-banking sector . However, the ability to quickly repair the home budget means that many people obscure the rational view of the situation in terms of their own financial capabilities.

Added to this is a cursory analysis of the provisions of the contract, which often leads to later problems with the payment of the liability. What are the consequences for the client for failing to comply with the loan agreement?

Risk included in the service

Risk included in the service

Delay in paying off a short-term loan can happen to anyone. Companies from the non-banking sector take this into account when granting a loan to a potential customer.

They also have their own ways to deal with overdue payments by, for example, sending reminders, calls or reminders . However, if the indebted person avoids contact with the creditor and does not try to settle the amount in any way, the lender can resort to more radical and painful methods for the client.

Interest and reminders

bank

In the event of arrears, the lender has the right, in accordance with the provisions of the contract, to calculate extra interest, which will additionally increase the total cost of repayment. The standard form of admonition to a debtor is to send him reminders, the cost of which is charged to the customer who is in default of repayment of the loan. The reminder is usually sent between 7 and 21 days after arrears.

Such a request for payment may be made by e-mail, telephone or letter. Prompting is of course just one of the first forms of pressure. Further consequences of non-payment of a loan may include, among others: deterioration of the debtor’s credit history, entry in the register of debtors, difficulties in installment purchases, inability to conclude a subscription contract or much higher total costs of the loan taken out.

Debt collection and debt collection proceedings

Debt collection and debt collection proceedings

Pursuant to the provisions contained in the standard loan agreement, in the event of failure to pay the liability on time , the loan company has the right to terminate the agreement by providing the debtor as the culprit. This procedure can be implemented even before the case is referred to the debt collection department.

The recovery process usually begins with an attempt to amicably resolve the situation . Then the representative of the loan company tries to encourage the debtor to pay the liability by direct contact and proposing, e.g. spreading the payment into installments convenient for the client.

If the whole process does not bring any results, most often the loan company decides to sell the debt to an external debt collector, who will try to collect the debt from the debtor. However, if this method fails, then the case is referred to court in order to obtain an enforcement clause and refer the case to a bailiff , which is the final and most painful way for the debtor to enforce the claim. The bailiff’s options for action are much broader than those of a debt collector and most often relate to the attachment of cash, movable or immovable property belonging to the debtor.

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