What happens if we do not pay back the loan installments on time?
Receiving a payday loan or a loan without a BIK from a non-bank institution is not much of a problem now. Many loan companies reduce the requirements needed to get payday loans, so you can get a loan without checking your clients in the debtors’ databases. A person applying for cash can take advantage of a quick loan without checking his creditworthiness, without having to document his income. However, each borrower is required to meet the conditions set out in the signed contract – a particularly important issue is timely repayment of debt according to installments of a certain amount. It is the failure to comply with their obligations that causes adverse consequences for the client.
Loss of credibility
First of all – the debtor who does not return the loan amount on time is exposed to the loss of his credibility. When applying for another loan, the company where the client has ceased to be credible will not be willing to grant another payday loan. However, this is the least painful effect of unpaid debts. The real problem may be debt collection procedures, which are used by banks and loan companies. Preliminary debt recovery proceedings are initiated against the customer who repays the installments untimely. At the beginning there is contact with the customer, usually by phone. If the customer answers the phone and is willing to cooperate, he can be sure that further debt collection proceedings will be suspended. However, if he is not in contact with him and does not adapt to the new arrangements, he can expect repayment reminders by letter prompts, and then the visit of the debt collector. All costs of debt collection procedures are included in the customer’s debt, therefore delaying cooperation with a loan company works only to his disadvantage.
The last way for a loan company to recover is bailiff enforcement. The company has full right to it after obtaining an enforceable title during a court case regarding recovery. Such a court case does not require the debtor’s presence, and the procedure is very short due to the client’s declaration (when signing the loan agreement) about submission to enforcement. After receiving the court’s approval, the bailiff can start his procedures. The bailiff usually collects the debt from the client’s income, i.e. remuneration for work, retirement or disability pensions. It can also take care of savings on a bank account, real estate, car or household appliances. All bailiffs carry an additional cost for the customer because they are charged with enforcement fees.