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There are many advantages that different financial companies can offer us at the time of granting a loan in our country, however, it is the task of the interested party to analyze in depth the different risks that are assumed when hiring a service of this kind, for this way to arrive at a responsible decision about which product to select. The importance of this task lies, among other things, in that failure to pay the installments of a loan brings economic and legal consequences for the debtor. For this reason, today we will not only see what happens when a loan is not paid on time, but also, we will detail what are the possible solutions in the case of being in that situation. Finally we will list the aspects that must be taken into account before hiring a loan to reduce the chances of falling behind with the payment.
What are the risks of not paying a loan on time?
1. Additional interests and commissions
During the first months of delay, the entity will begin to charge delinquent interest rates that are higher than the common interests, in turn, may add commissions for claims, among other costs that the company assumes when making the claim. The commissions and interest are added to the debt that we already had and that is why every day we spend without paying, the amount of the debt will increase complicating more and more the cancellation of the loan. It is important to say that the entities act under a legal framework that sets a limit to the percentage of delinquent interest that can be charged. If they exceed the limit, they will be considered usurious interest and in that case the client may initiate the pertinent actions to the case.
2. Judicial Actions
If our debt continues after the first three or six months, the entity in question may begin actions that lead to the legal claim where lawyers enter whose fees must be paid by the debtor. In general, if the debt persists, this process becomes the seizure of the present and future assets of the credit holder, as well as, it will bring consequences to third parties if it has been presented to another person as guarantor of a loan, if thus, the entity will request the guarantor to respond to the debt. Most of the time the bank starts by executing the seizure of bank accounts or salary, but if the balance is insufficient to pay off the debt, the seizure of assets such as a real estate or a vehicle will proceed. Justice will never be able to garnish the minimum wage, food, clothing or instruments used by the debtor to work.
3. List of defaulters
Once the company initiates the judicial process to collect what is owed, our name will begin to appear on the list of defaulters, that is, our negative credit history will eventually appear in the true that is a report about our financial behavior. commercial as personal. This will complicate access to financing tools in the future. To get out of the truth is to cancel the debt and wait two years which is the time that the law stipulates for a debt to stop appearing.
What do I do if I get behind with the loan payment?
First, we must anticipate the problem and inform the entity that we can not pay the next installment so that both parties can find a solution.
A. One of the possible measures to be taken is to refinance by extending the date on which the loan expires. In this way, the term will be extended by adding the refinancing charges to the original debt.
B. Obtain a grace period. Sometimes, the entities grant the client the facility of not paying the credit for a certain period of time.
C. Some financial companies have credit products that are intended to buy the debts that the client has with other institutions. In this way, the company takes over the debt and the debtor begins to pay a new loan. Hiring this type of product is a possible solution to the problem of not paying a loan on time.
D. If your personal loan has high interest, a possible solution is to request a loan with your car as collateral or a mortgage with your home as collateral. In this way, you will obtain a loan with a lower rate that will help you to cancel the personal loan, since these loans tend to have a higher rate. As a result, you will access lower fees in a longer period of time to pay.
It is important to clarify that the “A” and “B” solutions raise the amount of our debt, however, avoid the risks already detailed.
What to keep in mind before taking the loan?
One of the ways to avoid late payment of credits is to make a full analysis prior to hiring a loan. In this way, we can plan the payment of fees in such a way that they always fit within our budget. For this it is useful to take into account the following items:
● Inquire about the total financial cost of the loan that we want to access, since with this data we will take into account all the costs of receiving borrowed money and we will be able to predict exactly the amount of money that we will have to pay month after month.
● Make a responsible calculation of our true ability to pay. For this, it is necessary to take into account our income and expenses in order to know what our saving capacity is. The professionals advise not to allocate more than thirty percent of the income to the payment of debts (it is a generic percentage that can vary according to the particular situation of each person).
● Not to be adjusted, that is to say, the ideal would be to allocate a percentage of the income to possible inconveniences that we did not expect.
● It is good to ask for the sum of money that we really need and not a larger amount. With this criterion, we will not allocate more than just and necessary money to pay the loan.
Stop paying a debt is not the solution to a conflict, but rather the deepening of it, because, this brings consequences that grow as time passes and we continue without paying. That is why, in our monthly budget, the payment of debts must be a priority.
Now that you know what happens when you do not pay a loan on time, as well as the recommended criteria to follow to avoid these risks, you can continue with the contracting of your loan taking into account everything detailed in this note. To quickly compare the offers that the most important companies in our country have to offer, we suggest you use our online comparator where you will find prestigious financial entities.