Are you late with loan repayment? Check what the consequences are.

Caution of funds and loan companies and thorough verification of clients’ solvency even before concluding the agreement does not exclude the situation of non-payment of the loan by the borrower. There can be many reasons for this (e.g., deterioration of the financial situation due to job loss or lucrative client), but non-compliance with loan terms always involves negative consequences – what kind? It depends on the provisions of the specific agreement. Below we present the four most common consequences of non-payment of the loan.

CONSEQUENCES OF NON-PAYMENT OF THE LOAN – ADDITIONAL CHARGES

If payment reminders do not result in the repayment of the debt, the loan company may initiate debt collection actions or take the case to court and thus involve a bailiff (already after 30 days of delay in repaying the loan obligation). The borrower is then charged with all costs related to such actions. Non-payment of the loan may also result in (and usually results in) additional interest being charged for each day of delay in repaying the debt.

In the case of financial deterioration, Alpha Credit clients, the main partner of Top Advisor, can count on flexible restructuring of the loan taken and, if the situation is promising, may have the chance, for example, to extend the loan agreement or even reduce installments.

CONSEQUENCES OF NON-PAYMENT OF THE LOAN – REGISTRATION IN THE DEBTORS’ REGISTER

Another consequence of non-payment of the loan may be registration in the registers of economic information bureaus such as the Debtor Register EERIF. The right to make such an entry arises with already 60 days of delay in repayment, provided that the borrower was previously informed in writing about the intention to send the relevant data to the register. Note that registration in the debtors’ register, regardless of the amount of unpaid liabilities, often involves the blocking of access to banking products (not only loans but also accounts, cards, and so on). Debtors may also have a problem with purchasing goods in installments.

CONSEQUENCES OF NON-PAYMENT OF THE LOAN – TERMINATION OF THE LOAN AGREEMENT

Loan defaults and other irregularities related to loan repayment are associated with the deterioration or even loss of creditworthiness of the unreliable borrower. Defaults and the subsequent entry on the public debtor list may result not only in the refusal of contracts by financial institutions, but also by potential business partners.

CONSEQUENCES OF NON-PAYMENT OF THE LOAN – SEIZURE OF COLLATERAL

If a case of non-payment of a loan goes to court, a bailiff will intervene. The bailiff has the right to collect the outstanding amounts directly from wages and other benefits – such as pensions or annuities. He or she can also enforce the debt by seizing the debtor’s property with a total value that covers the size of the outstanding loan, including all additional charges.