Personal Loan Defaulters Beware Case Study

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Personal Loan Defaulters Beware

Certain eventualities and dispositions often hamper an individual from maintaining a regular and a healthy financial record but lets explore what happens when you default on a personal loan. Firstly, you are immediately termed as a “defaulter” and the implications on your credit profiling are huge. However, you don’t have to remain a defaulter all your life and hence we shed light below on various ways to rectify your situation.

What leads to defaulting?

Personal emergencies, loss of job, death, company going bankrupt, accidents and various unpredictable calamities can lead an individual to defaulting on a personal loan. In such cases if the bearer is uninsured or hasn 't left equivalent funds to tide
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It is only a few deferred payments that the lending clubs actually initiate the process of collections. However, reminding the customer to keep a good track of his or her credit rating is entirely at the discretion of the lending clubs. Following some simple steps while dealing with a personal loan deficit can make the bearers life much easier. For example, as soon as you are aware of your situation the first step would be to inform your lender and ask for their understanding.

How to manage personal loan defaults?

There are some key aspects that the bearer must do in order to rationally resolve the issue of delay and lapse.

1. Clear you intentions: The bearer must inform the lending club about the situational crisis and the reason for the delay. A workable and empathetic option can be charted only if the bearer is able to prove his intentions to repay. Most banks are empathetic if the bearer genuinely ascertains their willingness to pay. Subsequently, the bank will also make provisions to aid the bearer and will with hold the issuance of any such statement in their
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Deferring the payment: A temporary relief can be sought from the bank where in both the parties agree to with hold the payment for a specified duration. The lending club does impose a penalty for this duration but then once things are certainly settled, the bearer can continue to pay off his loan as per the original time frame decided upon with the lending club.

4. One time settlement: In case of uncertainties, you have the option to settle your outstanding personal loan amount by making a one-time settlement. The lender can waive off certain charges from the total amount payable and will offer a one-time payment for the purpose of settlement. In case of aggravated financial instability, the bearer will have to file for bankruptcy and will have to free himself from the loan commitment.

5. Conversion into secured loans: Since a personal loan is an unsecured loan, lending clubs tend to be more agile and impromptu in recovering. By offering a security, the bearer can win the lender’s trust and can thus bring down the rate of interest for the EMIs while

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