Once a personal loan has been obtained it is necessary to pay close attention to the expiration of the installments, which normally have monthly frequency. But what happens in case of late or non-payment?
Let’s see immediately what happens in case of non-payment of one or more installments of a loan or mortgage. The main repercussions:
Each payday loan contract must provide for the default rate applied in the event of non-payment. This rate may vary from company to company, but in all cases it must fall within the threshold rates communicated quarterly by the U.S. bank. Each credit institution complies scrupulously with these conditions, but if the client is not sure of the actual compliance with the law, the advice is to rely on a consumer association. The latter will calculate if the rates applied fall within the thresholds in force.
To know the consequences in advance, just read the pre-contract and / or the contract signed with the bank or with the financial intermediary, which lists the obligations to which the consumer must comply and which also indicates the extent of the sanctions in case such obligations are not respected.
To avoid all these consequences it is advisable to evaluate, when requesting a personal loan, those products offered by banks that provide alternative repayment solutions in case of difficulty: such as the possibility of skipping an installment, varying the amount or shortening or lengthening the plan of return. In any case, if you are in difficulty in paying an installment, it is advisable to contact your bank promptly before the deadline in order to find an adequate solution to the problem.
Inform the lender
When you realize that you cannot repay the sum of money due on the maturity date of your personal loan, you should inform your lender about it in any form that is convenient for you. It is best to send an email or a letter, but you can also contact them by the phone, and request a rollover. A rollover is a renewal of your debt, where you stand to pay the financial charges and possibly an additional debt rollover fee, and get to have your repayment period extended, usually for the same term as the initial loan.
Ask for a rollover
You should keep in mind that only 3 states allow unlimited number of rollovers, while 22 states prohibit them altogether. If a rollover is not legal in your state of residence, the lender will be entitled to cash the postdated check against which your loan was secured. It is therefore the best strategy to estimate how possible it would be for you to repay the debt within the stipulated time period before you apply for a loan.
Inform your bank
In order to prevent the lender from accessing your account, instruct your bank to decline the payment. It is your right as a customer. But you should do so at least two working days before the payment is due, otherwise the bank might not be able to interfere. In case you issued a post-dated check, contact your bank and ask them to cancel it.