Each commitment should be repaid within the period provided for in the contract. What threatens us when we are late with repayment? What steps can the bank take against an unreliable debtor? After what time will the financial institution claim its money? We invite you to read!
Why is timely repayment of liabilities important?
By signing the contract, we undertake that we will repay borrowed funds on time. The installment should be paid by the given day in the repayment schedule. This does not mean, however, that if the repayment deadline is e.g. April 30, we can make the transfer exactly on that day.
The date appearing in the said schedule is the final date on which the money should be on the creditor’s or lender’s account. In practice, this means that when repaying a loan or a transfer, the next installment should be repaid in advance so that the money can reach the entity from which it was borrowed.
Interest and additional costs
Regardless of whether ‘we’ are only late in paying a single installment or stop paying the loan at all, the bank will start charging us default interest for late payment. They will be calculated on the amount of unpaid capital from the day following the due date of payment of the installment. The amount of interest is calculated on the basis of a variable interest rate, the amount of which may not exceed four times the EasyCash loan rate.
In addition to charging criminal interest, the bank will ask for its money. Importantly, we will have to pay for each of these payment requests. Notifications about the need to pay may be in the form of text messages, telephones, e-mails, as well as official reminders, i.e. official letters reminding about the payment of the debt. The costs associated with such reminders can be found in the loan agreement.
Termination of the loan agreement
If we have a slight delay in repayment, we have no reason to worry. For the bank, it is not a basis for terminating the loan agreement, and thus for calling on the debtor to settle the outstanding liability immediately.
It looks a bit different when we have not paid several installments and we avoid contacting the borrower. In such a situation, the financial institution has the right to terminate the loan agreement with an unreliable payer. Therefore, if there is a risk that we will not be able to pay the next installment, it is worth communicating with the bank in advance and informing him of the situation. If we have paid our liabilities on time so far, the bank may grant us credit holidays or extend the loan period, which will reduce the monthly installment.
Remember, however, that in most cases these are not free options. In addition, we will not use credit holidays for every bank. It is good practice to check how the bank approaches clients who have experienced temporary financial problems before signing the loan agreement.
If the creditor fails to agree with the debtor, he has the right to sell the outstanding debt to the claim collection company. Thus, having any unpaid obligations, we must reckon with the fact that by assignment of receivables they may be sold to another entity without our knowledge and consent. This possibility results from art. 509 of the Civil Code.
It is also worth knowing that whoever buys an outstanding claim from the original creditor has exactly the same rights as the previous claim holder. Therefore, the secondary creditor may call us to repay the debt and take all steps provided for by law to enforce it, e.g. transfer our data to one of the registers of unreliable payers.
Often, the very spectrum of visibility in BIK or KRD is for a person who has been avoiding repayment so far, sufficient motivation to settle the payment. A debt collection company may also sell a debt to another entity (the debtor’s consent is also not required).
The uncollected debt may be put up for sale, e.g. on the debt exchange. Only after the data related to the debt are made public, the debtor is informed about this fact. It is also worth knowing that the information about debt is widely available, which means that everyone can view it. They can also appear in search results, which means that a wide audience finds out about debt and the debtor ceases to be anonymous.
If the amicable settlement solutions fail, the creditor may take the case to court and then to the bailiff. However, both banks and loan companies emphasize that bailiff enforcement is a last resort, which is used only when the debtor avoids contact and does not show willingness to cooperate or repay the debt.
A claim for payment order can be filed by both the creditor and the company acting on its behalf. Court proceedings for an indebted person are additional costs, as their debt is increased by fees related to court and enforcement proceedings.
After a final court verdict has been passed in a given case, it is forwarded to the bailiff. As a government official, the bailiff has the right to seize specific movable and immovable property belonging to the debtor. In addition, bailiff enforcement is carried out against unreliable payers from a bank account (then the information that we are debtors will also go to our employer). There is a catalog of things that a bailiff cannot take, but in principle he has quite a wide range of powers.
Maybe I’ll pay back the loan sooner?
A borrower who has additional funds may consider paying back the loan early. If he decides to do so, he will not have to worry about “forgetting” the repayment or being late with the installment. However, it is worth knowing that early repayment can be an expensive solution.
The Act of 23 March 2017 on mortgage loans and supervision of mortgage brokers and agents shows that the bank has the right to charge a commission for early repayment of loans with a variable interest rate when the repayment occurs within 3 years of the conclusion of the contract. The amount of this fee may not exceed 3 percent. amount to be repaid and at the same time exceed the interest that would have been accrued during the 12 months of loan repayment.
If we want to avoid having to pay a commission, we can either repay or overpay the loan after 3 years, or choose a bank that does not charge such fees. It is also worth asking before the conclusion of the contract whether early repayment is possible and the related costs.
Calls for payment, penalty interest, debtor bases and, in extreme cases, bailiff enforcement – these are just some of the consequences of not paying your obligations. Obviously, it is best to avoid arrears. However, if this happens to us, it is worth communicating with the entity to which we owe money as soon as possible.
An attempt to settle the dispute amicably is a mutually beneficial solution – the bank will recover its money (even if it takes a little longer), and the person with financial difficulties will pay back their debt and will not have to fear calls for payment, loss of creditworthiness or that, that one day a bailiff will knock on her door.