Unforeseen expenditure, problems at work, health problems or inadequate management of the household budget can lead to difficulties in meeting commitments. However, liquidity can be recovered. What should I do if I have problems paying on time?
When you are having problems paying your liabilities on time:
- Look for a solution in the contract - some loans and credits have a "credit holiday", i.e. the possibility of suspending the payment of installments even for a few months. This prolongs the loan repayment period by more months, but gives the possibility to relieve the household budget, for example, when for 3 months we do not have to pay the installment.
- You can apply to the institution for solutions such as reducing the amount of installments for a certain period of time or even changing the way you pay off your loan or credit. The key is to motivate the proposal - we should describe our situation absolutely honestly and accurately and prove to the institution that if it agrees to our solution and the special conditions, it will actually be a win-win arrangement, which means that both sides will be satisfied.
- Consider consolidation if you have several different loans or credits. If you can't pay the installments because you have too much of them in relation to your earnings, it means that you're approaching being overcredited. You need to reduce the monthly load to avoid more serious problems. Check consolidation loan offers, ask for simulations and calculate which option is best for you. Consolidation consists of borrowing from one institution an amount that will cover the repayment of all loans and credits contracted from other institutions. Thanks to this, several loans or credits are converted into one, spread over a longer repayment period, but with a much lower installment. This is a relatively expensive solution, as long installments are also long interest payments, but you can protect yourself from bankruptcy and problems with the debt collection departments.
What can happen if you do not repay on time?
An exemplary scenario of events that occur when you do not repay on time is as follows. First of all, reminders from the institutions will start, as this is a breach of the signed contract which included the reimbursement schedule. Reminders can be e-mail, SMS or letter. Already then we should make contact with the lender or lender.
There may then be reminders for which the institution may charge additional fees, which will increase your arrears.
If the institution has its own recovery department, it will first make use of it. You may then be contacted by an employee of the lender or lender to talk about the terms of repayment. This is usually the last moment when we can really talk about a new repayment schedule and go with the institution to compromise. Our contract can then be terminated completely. We then have to return the borrowed money and our debt can be sold to an external debt collection company, which will enforce the repayment. In the worst-case scenario, we may be faced with court rulings, which will be the basis for the bailiff to initiate proceedings.
If we do not repay the instalments regularly, we also damage our credit history. Our late or total non-payment is recorded and our credit rating at the Credit Information Bureau decreases. When we go for a loan to another institution, even for example for installments on TV, we can hear a refusal - precisely because of the bad history of paying off previous loans.
Loans operate on a simple principle - the institution, lending money to the client, takes the risk. The risk charge is the interest or commission paid by the customer. From a business point of view, your lender does not want you to be in trouble either, and will certainly reach out a helping hand when negotiating new repayment terms. When you borrow money from family or friends, you don't want to lose their trust. When payment problems arise, you immediately call your loved ones and ask for understanding. Do exactly the same for loans and credits from institutions.