What to Do if You Can’t Afford the Loan Payment?

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BusinessFinance

When you are caught unaware by unexpected financial crisis, you start to fluster. Tension mounts up if you are already relying on a debt. Even though you have chosen a direct lender offering you loans at the most competitive interest rates, chances are you become unable to reimburse your debt.

You may think of taking another loan, for instance, 12 month payday loan for bad credit from direct lenders, to fulfil your needs, but how will you pay back both loans on time? Is not it a situation of a further turn of the screw?

You can find yourself stuck in a tight spot anytime. If you find that you are not able to pay off the loan, you should find some solutions instead of flinching from payments.

What happens when you fail to pay off?

Considering the worst scenario that you hardly have funds to reimburse your loan instalments, you will owe much more money as interest and penalty fees will increase. Your credit score will go down and chances are you will be listed, as a borrower with very poor credit report and you will not have any loan approved in future. However, some lenders can think of disbursing funds after a few years if your income statement is robust.

Some borrowers doubt that this will end up with imprisonment. You cannot be incarcerated immediately as you make a default. This is the last step when all other possible ways to clear the debt have failed, or when you have not replied to emails and messages sent by your lender.

Undoubtedly, falling behind on repayment dates is extremely stressful and frustrating, but as a responsible borrower, you should quickly follow other ways to keep legal proceedings at bay.

What should you do when you are falling behind on payments?

  • Pay even if it is overdue

Logically, you should pay your instalments on time because 12 month loans come with high interest rates. This is because they follow no guarantor policy. If you miss your instalment due to any reasons, you should pay it as immediately as you arrange your funds. The more you delay, the more interest rate will build up.

  • Consolidate your loans

A debt consolidation plan is a better idea when you are failing to pay on time. Ask your lender to consolidate your existing loans into a new one. You will pay the whole of your debt in equal instalments at an affordable interest rate. You can also contact your credit card company to transfer your card balance at zero-interest rate, which means you will pay your credit card bills without interest. However, make sure that you pay within the interest-free period. Otherwise, it will cost much more interest fee than you have expected.

  • Talk to your lender

If you doubt that you will not be able to pay back your debt on a due date, you should immediately talk to your lender. Tell them what the issues are and why you are not able to pay. Your lender may propose some other ways. Even if your lender approves a new settlement way, you will lose some scores, but at least you will have paid off your dues.

  • Prioritise your debt

Try to skimp on food and drink if you foresee that it will be difficult to have money spare for payment. Be frugal and make a realistic budget. Make sure that you do not dissipate money on unnecessary things.

Reimbursing 12 month loans from direct lenders for bad credit people can be challenging. If you find difficulty in managing your instalments, you should talk to your lender to get other payment modes.

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