Loans now and here – What are the consequences of defaulting on loans?
“Loans now and here” may seem like a good deal. And is it in many cases also if you are in urgent need of money. It is just important that you comply with the loan agreement if the amount does not increase to the clouds in record time.
Reasons why you are suddenly unable to comply with the loan agreement
so you have fallen behind with the payment. When you apply for a loan, there are a number of conditions for the default of the loan that you confirm. Some of these conditions may be that the loan provider has the right to raise interest rates or that they may demand repayment of the loan. In short, this means that you can no longer pay off, but instead have to pay the full amount immediately.
The loan providers are aware that these are the terms of lending money in an easy and accessible way. Sometimes even without security or to people who are already registered as bad payers. Usually, they will start sending out jerks. On reminders there is always a small reminder fee. If you do not respond to these reminders, higher interest rates will be placed on the loan or the loan will be repaid.
Can’t pay? – written settlement
This is where it gets dangerous. With soaring interest rates, the loan can quickly develop to a much higher amount than the original. To pay off the entire loan at one go, few can afford it. Therefore, it is recommended to contact the loan provider directly and try to make an agreement on a written settlement. For example, the settlement may include an agreement that you pay a lower amount each month in return for interest rates not being as high. Loan providers will usually be interested in the prospect of getting the money back, rather than attributing higher interest rates that are not paid either.
If you do not pay, you smoke in RKI
If you do not make an agreement with the provider, the last consequence is that you will be registered in RKI as a poor payer. Standing in RKI can make it very difficult to get credit, take out loans and the like going forward. You will also be locked into your current bank without the option to switch, and in the bank it will be impossible to borrow money. No one wants to stand in RKI. It can affect you for many years. For example, it will not be possible to buy a house or a car.
You stand in RKI until the bill is paid. If you have multiple registrations, it is only when everyone is paid out that you are deleted. Alternatively, you will be registered for 5 years. The 5 years are renewed by a new registration.
It is always advisable to pay off all your loans. If one day it seems incomprehensible or impossible, help is available. If you are unable to negotiate with the loan providers yourself, it is possible to get professional help. This is the Luxury trap. However, it rarely happens that things go wrong. Also, keep in mind that it is not advisable or legal to take out loans to pay off loans. It will simply nurture the debt spiral and only aggravate your situation further.