Short term loans are meant to help millions of salaried class people to come out of the tight financial spot. In certain cases, people find it difficult to repay back the loan amount. You do not have to worry if you are unable to repay back the loan amount of short term loans.
The time may come at any point of time when you cannot afford to repay back the loan amount. The reason may be the shortage of cash that do not allow you to repay back the loan on time. In that case, you have the advantage of extending the repayment tenure of a loan. However, the interest rates and penalty fee will keep on accumulating that may add more financial burden of debts in your life.
Some of the consequences of no repaying back the loan amount are as follows:
When lenders are apparent that you cannot repay back the loan amount, he may garnish your wages till the time the repayment of loan has been completed. It basically means that lenders take out the decided amount from your paycheck every month till the debts get cleared.
- Extend the repayment period:
Anytime when you think that you find difficulty in making the timely repayment of loan, you should contact your lender immediately. Lender understands your situation and will ultimately give you the best solution to avoid making loans defaults. Extending the repayment plan would help you avoid falling into severe situation. You can ask for the rollover option if you find difficulty in repaying back the loan.
- Lose the eligibility for taking further loan or credit:
Delaying the loan payment or making loan default will directly affect your credit scores and lower it down. It gives a bad impression to the lender and thus lender feel reluctant to offer the loan to those borrowers who had bad experience with their previous loan or credits. So, having strained credit records act as a hurdle in getting the approval of the
badcreditloansinontario.ca .
Not making the repayment of a loan or delaying or skipping the payment will be reported to the three major credit bureaus and it may harm your credit scores. Any damage to your payment history will subsequently lower down your credit scores.
When your loan payment is 30 days or more overdue, your loan will consider as default. When the lender finds that you cannot be able to repay the loan amount, he may pass your account to the debt collection agency. This is not favourable for the borrowers as the debt collection agency adds their additional fees which keep on adding the debt burden. This will only make your situation even worse. You may end up facing the harassment from the debt collectors.
Tips and warnings:
- When you have a number of outstanding debts, do not wait until you are delinquent, you should quickly contact with your lender to find out the immediate solution.
- Following the strategy of automatic payment helps you make your loan payment without missing or delaying. However, it is important that there should be enough balance in your account on the every due date of the loan.
- Budgeting before taking out a loan will help you to repay back the loan amount wisely.
