When you borrow money from your friend, you do not have to worry about payment periods because they are your friends. However, the story is a little bit different regarding borrowing money from lending institutions. For example, an individual taking a credit is obliged to return the money he/she took to the lender and pay the interest back.
What Is A Late Payment?
The interest is, in essence, the cost of borrowing money. To better illustrate the concept of a delayed payment, let us have a glance at payday loans. In this short-term financing, the math is simple: you borrow money today and return the borrowed sum as well as the interest in two weeks. A failure to give back money in a specified period of time is considered an outstanding debt.
Why Does It Happen?
The unsettled debt becomes a reality either because the debtor faced some unexpected circumstances that resulted in a shortage of liquid money or because the debtor failed to carry out a proper risk assessment and planning. The same is true for individuals who take payday loans. In the first scenario, the individual who had already been facing money related troubles was planning to return the money he owed in time.
However, he/she faced an unexpected incident. For example, one was fired from work or was robbed. In this case, the person cannot pay back the debt before the deadline. In the second scenario, the individual knew from the very beginning that it would be difficult for him/her to return the money, but nevertheless, took a loan. In both cases, the debtor is behind time with the debt.
What Happens Next?
- The lender would try to reach you by phone to communicate that you are overdue.
- The lender would call people indicated as your trusted contacts, including your relatives, friends, and co-workers.
- You will get a fine that was specified in the contract.
- If the lender still does not see the money, he/she might file a lawsuit against you.
What To Do Then?
However, even if many things went wrong or the way they were not supposed to, you can overcome the problem by using the following tips:
- Answer phone calls from the lender. Answer it so that no one else can know about your problems.
- Explain the lender that you will give back money ASAP.
- Make everything (in a sensible understanding of course) to accumulate the necessary sum before the next fine. Advice: ask friends to help you out if everything is that bad, but do not forget to give them money back too.
Before presenting recommendations on how to address the issue of delinquency, it is imperative to remind one more time that when taking any loan to be prepared to give the money back.