After taking out the loan, hardly anyone assumes that they will have a problem with its timely repayment. However, all you need is a sudden, unforeseen life situation, e.g. illness in the family, the need to repair the car or other expenses that were not included in the budget. In such cases, we may face the vision of not being able to repay the loan on time. Is it possible then to extend the repayment period? If so, how? What costs should be taken into account?
Extension of the loan repayment period – how to do it? When is this possible?
Many people wonder whether it is possible to extend the loan repayment period in case of any problems. Experts in the non-bank loans industry dispel doubts in this matter. They argue that loan companies care primarily about customer satisfaction. Most lenders are aware of the relationship: a satisfied customer equals good market reputation and thus business development. A satisfied borrower will come back for another loan after some time, he can also recommend the services of a loan company to his friends and family, as well as leave a positive opinion on the Internet. In the era of high competition, loan companies try to meet the expectations of customers.
Refinancing, extension of repayment or lower installments
Industry specialists agree that loan companies often offer borrowers who have problems with timely repayment obligations other options, such as refinancing, extending the repayment period of the loan or spreading the obligation into a comfortable installment repayment. Loan companies are well aware of the importance of contact in the event of any doubts. Customer service offices, chats with a consultant, and even a direct conversation with the lender’s representative – this is what customers expect, and loan companies are trying to provide it to them. Experts also point out that lawsuits are expensive and often have to wait for years to end. Therefore, the lender wants to avoid such a situation and tries to find another solution that will satisfy both parties. This approach only confirms the belief that it is worth talking to the loan company about your possible problems in the timely repayment of the loan.
How to extend the loan repayment period?
Financial problems can affect any customer. Lenders are aware of this. However, honesty is necessary. Contact a loan company representative and clearly outline your situation. The consultant will propose a solution that will satisfy both sides. As a rule, it is an extension of the loan repayment period or its refinancing. Information on the option to extend the repayment period should be included in the lender’s regulations and in the loan agreement or attachments.
The repayment period of popular short-term loans, the so-called payday loans can usually be extended by 7, 14 or 30 days. Depending on the offer of the given lender, the repayment period can be extended once or several times. However, this may involve additional costs.
How much does it cost to extend the loan repayment period?
Extending the loan repayment period may involve additional costs. Their amount is specified in the loan agreement or annex, which is a table of fees. Information on how much it costs to extend the repayment period can also be obtained during a direct telephone or email conversation with the lender’s consultant. As a rule, it is a fee, which is several percent of the borrowed amount.
Delays in loan repayment – what are the consequences?
If the borrower has problems repaying the liability on time, usually the loan company contacts him and tries to propose a solution. It can be extension of the repayment date, spreading the loan into installments or refinancing. Some lenders initially ask you to explain why the client is delaying the payment. Only when they are sure that the matter requires their interference do they offer help. As a rule, the lender and the borrower reach a compromise.
Fees for late repayment of the loan
In the event of late repayment of liabilities, however, the borrower must take into account the charging of fees in this respect, the so-called interest on past due debt. The maximum amount of this fee is specified in the Civil Code (Article 481 § 2 ). This is twice the reference rate of the Pocket Choice Bank and twice the 5.5%. Currently, the NBP reference rate is 1.5%, so the maximum interest cannot exceed 14% per annum (1.5% x 2 + 5.5% x 2). Default interest is calculated on the next loan installment.
Lack of timely repayment of the liability is not only connected with the calculation of additional interest. In addition to financial issues, psychological aspects are also involved. This is associated with increasing stress, possible initiation of debt recovery proceedings, and in extreme cases even falling into a spiral of debt and entries in the debtors’ databases. An unpaid loan may result in legal action and commencement of bailiff proceedings.
If for any reason we are unable to pay back the loan, be sure to contact a representative of the non-bank company. “Burying your head in the sand” is the worst solution that we can decide in such a situation.