Almost every bank institution provides customers an opportunity to get a loan. There are also different microfinance organizations that offer microcredits online on a bank card. Any personal credit has its payment and repayment obligations. Before getting a loan, it is very important to carefully read all the terms written in the documents and fully understand your financial capabilities. There are two parties to a transaction, so both of them, a bank and a customer, must implement all the terms of the contract.
There are people who are planning to get a personal loan knowing that they have no opportunity to pay it off. They usually do not think about what will happen later if they will not make payments on time. This is a very big problem so everyone should learn more about terms of lending before.
Types of Sanctions
What sanctions could be if a customer does not make loan payments at the proper time?
- Financial Sanctions.
- A delay penalty represented by interest or a fixed amount of money, or early repayment of the full amount of the credit. It depends on bank terms.
- There are also fines for false information provided by a customer, distribution of the confidential data to third parties.
- Retention of funds on bank accounts.
- Property Sanctions. If it was a secured loan, then a customer can lose the subject of the pledge, his movable or immovable property.
- Criminal Sanctions. Such sanctions include forced labor, arrest, etc. If there is a handed down judgment, which a borrower refuses to fulfill, he could be looking at some serious jail time. But at first, a person will be brought to an administrative liability after a bank proves the guilt of its customer. In case he doesn’t have a real opportunity to execute a judicial act, it is impossible to bring him to the responsibility.
The Consequences of Late Loan Payments
- Credit downgrade. The credit history of a borrower is one of the most valuable sources of information about a customer’s reliability to help a bank to make a decision about lending at all and a limit as well. It contains a complete list of information about all loan obligations a borrower has or had. Any delayed payment of credit appears instantly in credit history for at least 10 years even if a loan will be repaid later.
- Regular bank reminders. Such bank reminders should be messages, phone calls, and emails only in a polite form and strictly during working hours. No late-night disturbance. But unfortunately, not every bank employee fulfills his duties in the right way.
- Filling of primary allegations. It is the last and the most extreme measure, which a bank can take. The credit of a borrower is frozen during this procedure.
To avoid all the unpleasant consequences, a customer should warn the lending company in advance that the next payment will have a delay. Most banks are ready to accommodate their clients.