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Failure to pay back payday loans – check the consequences

Failure to pay back payday loans has very unpleasant consequences for the borrower. He must reckon with the fact that the institution in which he incurs debt will demand repayment and use various debt collection tools. These are very different and what will be used depends on many factors. What are the consequences of not repaying a quick loan? No funds to pay back the loan – what to do?

Loan companies always want to get the money back. This is why, with delayed customers, they try to reach an agreement at the beginning and do not immediately proceed to hard debt recovery. If you do not have the means to pay back the loan on time, you can choose to postpone the payment. The loan agreement says whether refinancing is possible. It also specifies the cost of postponing the loan. People who have problems paying back payday loans should always contact the Funding Square Bank, even if it has already started the debt collection procedure. Avoiding contact causes even more problems.

See also how to pay off payday pay if you don’t want to get into debt.

Late loan repayment – consequences

Late loan repayment - consequences

The first consequences of non-repayment are already on the first day after the deadline set out in the contract. At the beginning, the loan company charges the maximum possible contractual interest for late repayment. Thanks to the introduced act on payday loans, currently the maximum percentage is 14% per annum. In addition to the penalty costs, the loan company launches an internal debt collection procedure, which aims to effectively and quickly recover the outstanding loan repayment. Internal debt collection procedures include sending reminders and reminders through various communication channels. Apply among others SMS messages, emails, registered letters, telephones. Persistent avoidance of payday payback also means negative entries in the databases, which results in deterioration of credit history and problems with taking another loan, loan or inability to purchase in installments.

External debt collection

External debt collection

When internal debt collection fails, the loan company decides to transfer the case to external debt collectors. The debt collector contacts the unreliable borrower by phone or in person and he is intensively seeking repayment of the loan. When that doesn’t work and the borrower continues to evade its obligations, the case will be referred to court.

Settlements regarding overdue obligations are usually carried out by means of the EPU, i.e. Electronic Reminder Procedure. Its completion is the issuing of a 14-day payment order. Ignoring a court order means bailiff execution. A civil servant can seize real estate and other movable property, e.g. salary, benefits and other account receipts.

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Long-term loan – Best providers

 

Many people take out a loan at least once in their life. Whether car finance, real estate loans or instant loans – there are plenty of opportunities and reasons for borrowing.

If you want to keep the monthly payment burden as low as possible, you should opt for a long-term loan. This allows you to borrow a relatively large amount without being overwhelmed by the monthly installments. Whether 80, 120, 180 or 360 months – if you are creditworthy, you can choose any term.

Long Term Loan – Who Is It Suitable For?

Long Term Loan - Who Is It Suitable For?

Especially with large loan amounts, it is important that you have your finances under control and do not fall into the debt trap. For this reason, it is worth choosing a long-term loan. Even though the interest rates are higher with a long term, you will benefit from such a loan. What use is it to you if you have low interest rates, but the terms are too short and the monthly rates are too high? Such an imbalance can quickly result in financial chaos that, in the worst case, can endanger your family’s existence. For this reason, it is better to choose a long-term loan and keep the risk of insolvency as low as possible.

The best providers at a glance

The best providers at a glance

Of course, choosing a loan is not a snap. There are many factors to consider when choosing the right bank. Not only are low interest rates important – nowadays sufficiently long and above all flexible terms play an important role. A comparison on the Internet will find out which online banks can offer you cheap loans. Hours of bank visits, annoying phone calls and comparing written offers are now a thing of the past. Once you have found the right loan, you can easily apply for it online. The agreed loan amount will be transferred to your checking account just a few days after the contract has been processed.

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Credit without asking the employer

Borrowers occasionally express concerns that the bank would seek information from the employer before paying the money. Such a request is extremely rare in reality, because in most cases banks accept that almost nobody wants to inform the boss about borrowing.

Can the bank ask the employer at all?

Can the bank ask the employer at all?

In most cases, the loan applied for is granted to the customer’s employer without asking, as the data protection regulations only permit information in strictly regulated exceptional cases. The bank requires the applicant’s express consent to consult the employer and may not state the exact reason for the request. The mere indication of the address of the employer does not meet the requirements for queries from the bank to the employer.

The bank receives the amount of income from the submitted salary statements. If she wants to know the status of the employment contract, she can also request that it be presented to the loan applicant. This shows whether the employment contract is temporary or permanent. For large amounts, lenders are more likely to ask the applicant to provide a certificate that the employment contract has not been terminated than to make a time-consuming request.

According to widespread stories, some banks call the employer and are put through to the loan applicant. Neither the switchboard nor the employer find out the reason for the bank call, but corresponding control calls are only possible if the borrower has an extension, which is almost never the case with production employees.

In most cases, the bank grants a loan to the employer without asking, even if the appropriate right is granted in the loan application. However, if the bank customer deleted the relevant passage in the loan application, he would raise doubts as to the correctness of his information and risk rejecting his loan request. The passage of a possible query to the customer’s employer is no longer listed in many loan applications.

Inform the employer about the borrowing

Inform the employer about the borrowing

If, with exceptionally high sums, a loan is not granted to the employer without asking, the customer should inform his boss about the expected bank request. This is especially true when it comes to building finance or real estate to be bought. In these cases, it is advisable to talk to the employer anyway, since many companies offer the option of taking out an employer loan.

This naturally only covers a small part of the costs of real estate financing, but is associated with extremely low interest rates and is regarded by most banks as part of equity. Even if there is a passage in the employment contract stating that the activity requires regulated financial conditions, taking out a loan in an appropriate amount is usually not a problem.