In the event of arrears in the repayment of the loan, the loan may be terminated
Consumers who take out a loan should always ensure that their checking account has an adequate cover at the time the installment is collected. If payment arrears occur at the bank, the loan may be terminated. Of course, a bank will not cancel the loan immediately if a borrower defaults on a rate. As a rule, the customer is reminded, has to pay reminder fees and can compensate for the arrears. Many banks work with several dunning levels, that is, if you do not respond to the first reminder, you will receive a second reminder, a third reminder, and if you still do not pay, the claim will quickly go to the collection, which leads to, As a result, the loan can be canceled and the entire outstanding amount including the fees for reminders and accrued interest is immediately due.
What if the loan is canceled?
If a loan is canceled, it does not mean that it does not have to be repaid, on the contrary, the creditors do everything they can to get their money. For the borrower, this means embarrassing annoyance and a negative entry in the Credit Bureau, which in turn means that the creditworthiness is impaired and the borrower will not get any credit from other banks in the future. Borrowers who for certain reasons cannot meet their payment obligations should always contact the bank’s support and try to negotiate a payment suspension. Many banks are, of course, willing to defer or suspend installments for additional fees.
Can you grant a loan without costs?
Some companies are already using this option in connection with the loan offer, which is then even granted without additional costs. However, this always requires an amicable solution. Borrowers who are in debt and no longer respond to reminders must assume that they will have their entire loan canceled. Due to ignorance, many are unable to estimate what this ultimately means for them personally. The path to the debt trap is directly programmed. If you cannot find the way out alone, you should contact a debt counseling center. Here are competent contacts who support the borrower and also enter into negotiations with the creditors.
Often, the creditors are also willing to make a comparison before they can expect to lose all of the debt. The procedure in connection with a loan termination can also be extremely uncomfortable for the borrower if the creditor tries to pledge parts of the wages through the employer or if the bailiff is at the door and would like to pledge. Once it has gotten this far, many debtors ultimately have no choice but to register private bankruptcy. Then they are still obliged to do everything possible to repay their debts, but after six years of good conduct, the remaining debt is released.