Loan to Pay LoanLoans for the repayment of loans
Indeed, of the five Cs of loan (character, security, capability, terms and capital), it is your "character", your story of timely payment (which is mirrored in your creditworthiness) that brought you the loan, and it is this personality (creditworthiness) that is at risk if you do not pay back.
So what exactly happens if you get behind with your signed loan? There are five things a lender can do if you do not pay your loan and financial crisis for many years. Submit your loan for debt recovery. When you are in arrears with your signed loan, creditors can continue to collect the funds you have owed them and it is not a convenient procedure.
First your creditor will call you and send you a letter asking you to pay back the loan immediately and in full. However, if you do not pay, the loan can be sent to a debt collecting agent and the tactic becomes much more aggressively - especially if the loan is high. Notify your failure to the loan bureau.
Before the loan is in arrears, your delayed payment will appear on your loan statement. If that happens, your credibility will go down. As soon as a loan goes into total failure and into intern collector or (worse still) into a debt collecting office, this action shows up on your loan reports as "In Collection" and your credibility can sinking.
As with other damages to your characters (do you recall the 5 Cs credit?), it can take years to fix the damages to your credibility. The loan documentation you provide is likely to indicate that the creditor has the right to take any legal measures to enforce your debt. This remedy may involve assigning a debt collecting agent to you, or the creditor may commit to collecting the arrears himself.
The default (non-payment) of your loan is likely to result in a full request for repayment. Subject to your location and credit conditions, if you do not meet this requirement, your creditor or its representative may take action against you for credit balances plus fines and interest and debt collecting charges, plus attorneys' costs.
Makes it possible to get new loans expensive or inaccessible. There are several things that affect how difficult it can be for you to get a new loan. This includes the amount of the loan that has failed, how much you will not pay back and how long the loan will remain in recovery before you pay it back. The interest rate on new loans (if you are fortunate enough to be given a loan) is much higher than you are used to.
When you are in arrears with a loan outside insolvency procedures, your creditor can provide you with a 1099-C formula for the amount written off. Let's be honest; the impact of a bad debt on a digital signatures loan can be serious. If you do not pay back, your image or your credibility will be negatively affected (perhaps for years).
When borrowing with a signed loan, make sure that you can pay it back as arranged - keeping your good nature, your potential loans and even your reason.