Unpaid online loan Philippines – relationships with microcredit companies often turn into financial problems for the borrower. Moreover, the working conditions of most lenders provide for significant penalties for any delays. Therefore, the question of a private person, how to find out which microloans I owe, is quite logical and not surprising. Getting a correct and timely answer to it often allows you to avoid severe additional costs on the part of the client of the microcredit company. In addition, it is possible to identify unpaid online loan issued by fraudsters quickly.
Non-payment of Online Debts
Investopedia defines credit default as the failure to make payments on any loan or collateral. It involves not just the principal of the loan but also the incapacity to pay interest rates. Any borrower can default on a debt by missing payments, continuing to make late payments, or completely stopping repayments.
Lenders are required to notify the borrower of delays. But even if a bank or microfinance organization is silent, one should not hope that they will forget or forgive the debt.
It is possible that an SMS message about a missed payment or an email message did not reach you due to a technical failure. But the bank or lender will undoubtedly transfer information about the delay to the credit bureaus — and the borrower’s credit rating will be damaged.
It will be difficult for him to borrow money on acceptable terms in the future. And even if a person is not yet thinking about new loans, it is not in his interest to play for time. Penalties and fines will be charged for the delay — the debt will grow. People wonder can you go to jail for not paying an online loan in the Philippines — this is hardly the case, but it is essential not to bring the matter to a lawsuit.
If you want to figure out what happens if online loan is not paid Philippines, keep in mind that if during the last six months the borrower is overdue in total by more than 60 days, the creditor will have the right to demand the entire amount of the debt with interest, even if the contract has not yet expired. And for quick loans (less than two months), a person may be required to return all the money as soon as he delays payment for ten days. In addition, when the debtor stops paying, the creditor has the right to sue him. And the longer the delay, the more significant the amount will have to be returned.
What is the Responsibility for Non-Payment of the Loan?
Credit institutions punish their clients for non-compliance with the loan repayment schedule. Debtors are subject to penalties and interest.
If the borrower refuses to repay the unpaid online loan Philippines, the financial institution charges penalties and fines. Some terms of the contract provide for the application of both punishments simultaneously. The penalty is calculated daily. At the same time, its size cannot exceed the national bank discount rate ratio to the amount of debt.
If the borrower decides not to pay the unpaid online loan Philippines at all and no warnings and fines help to recover the amount of the debt, the bank goes to court. The lender has three years to bring the troubled borrower to justice by law. If the court satisfies the claim of the financial institution, the debt can be recovered by confiscation of property in an executive order.
How Do Lenders Deal with Debtors?
A loan at a lending company is a simple loan issued without an income certificate within 15 minutes. A fixed percentage is charged on the loan amount every day. Before contacting a microfinance organization, it is essential to calculate everything in advance. If you are not sure that you can repay the unpaid online loan Philippines 2022 on time, it is better to borrow money from friends or relatives. So what happens if you don’t pay online loans Philippines?
A person can await such things:
- SMS reminders. The phone number used to register with the lender will receive an SMS with reminders to repay the loan 2 to 3 days before the contract’s expiration. If the borrower fails to pay, the messages will come frequently;
- Calls to relatives. If the loan debtor refuses to pay, representatives of the lenders will try to influence him through public opinion. Relatives, work colleagues, and neighbors of the borrower will begin to receive calls with a request to convince him to return the money;
- Suppose the client does not return the money on time. In that case, the credit company will send an official letter to the address indicated in the questionnaire, demanding to repay the debt and pay a fine for violation of the contract terms;
- Contacting collectors. The increase in loan debt and the lack of response from the debtor to numerous warnings are forcing lending companies to seek help from collection companies specializing in working with problem borrowers;
- You will pay fees and interest that will accumulate on your loan. Contrary to what one might think, the loan doesn’t go away when you fail to repay a loan. In fact, without paying once, you are simply adding to the amount you owe. And the longer you don’t pay, the higher those fees. You receive late payments, penalties, interest, and other types of payments.
Late fees for outstanding loans in the Philippines typically range from 200 to 600 pesos per month, or 7 to 10% of the loan amount, whichever is larger. Depending on your credit, you may face repossession or foreclosure.
Borrowers who fail on a car or home loan face having their property and vehicle seized in the worst-case scenario. It will allow lenders to recover the money they have lent you. For instance, if you have an SSS loan, the property will be repossessed after six months of non-payment.
How Not to Run Into Scammers
Online loans are dangerous in cases where the lender turns out to be a scammer. Therefore, it is necessary to be extremely careful when applying to a microfinance organization.
It is better to adhere to the following rules:
- Carefully check the lender you are going to apply to. Find out if it has a website, an offline branch and how long the organization has been in existence. Often scammers create websites that entirely copy the services of other famous companies;
- Please note the application deadlines. Most lending companies issue a loan decision within 10-15 minutes. If you are asked to wait longer, you should be wary;
- Never pay a fee for reviewing an application. It is one of the types of scams common in the financial services market;
- Read the terms of the contract carefully. The document must indicate the amount, loan terms, interest rate, possible fines, and penalties.
To avoid worrying that online loans are dangerous, contact trusted microfinance organizations.
In the event of improper performance of obligations under the loan agreement, the borrower must be prepared that the bank will be forced to take actions aimed at returning overdue debts within the framework of the legislation.
What to expect:
- Calculation of penalties. According to the conditions established by the loan agreement, penalty interest is automatically charged for any delay. And even if you have never violated the terms of the contract before, you will not be able to avoid them if you do not pay. It’s like a snowball: there will be more and more debts than you can pay now, penalties will grow, and such a loan can be repaid until old age;
- Bad credit history. It will directly affect the assessment of the reliability and solvency of the client by lenders, so if in the future you are going to get a new loan from a bank with average rates, then when deciding on lending, you will be denied;
- Bank calls and field events. You need to understand that the bank will constantly remind you of non-payment under the contract using calls, SMS notifications, and e-mail newsletters;
- Early recovery of the entire amount of the debt. If the borrower violates obligations under the agreement, the bank has the right to early collect the granted loans and accrued interest on them, if this is provided for by the contract, and levy execution on the pledged property in the manner established by federal law. Such early recovery of debt does not occur accidentally or secretly. You should receive a notification from the bank that a decision has been made for demanding payment of the entire loan amount at a time.
Difficulties with debt repayment can always be resolved through negotiations with the creditor. If you find the best way how to pay online loan Philippines, you can get out of the debt hole. Explain why you cannot make payments as scheduled and provide proof if possible. In this case, a bank or a credit company will be able to meet you halfway by lowering the interest rate, extending the term of the contract, or writing off part of the debt.