In the age of information where everything can be learned by making a simple Google search, people still suffer the effects of not being able to acknowledge the payments on a loan they sought in the first place.
A number of factors are at play here, the first one being the basic lack of knowledge of people who are not tech savvy enough to inform themselves about financial products or service providers using the internet. The second factor would have to be the shady offerings done by more than one loan agency advertising superficial details on a deal that will not work as announced.
The issue seems to be centered on the fact that many people still can quite grasp the notion that banks and loan agencies offer loan related products to turn a profit. This profit is not generated by having the borrower pay the original amount of money offered to them but by having them pay an interest on it. Money subject to interest always generate revenues in the long run, that’s why so many service providers offer their services as loan agencies in a more functioning way than most banks.
- Handling Your Payments with Effectiveness
Taking a loan with a bank works as a completely different deal than taking a business loan with an agency like Discovery Credit. If you are asking for a loan in the same financial institutions where you have your savings account, you’ll have the backup of a longstanding business association with the institution.
If you have been disciplined with your finances, and you have a credit line or a credit card with them and it has been managed with responsibility, it counts on your favor to deal the payments of a loan with better conditions. With agencies you’ll be facing fewer requirements but also more demanding conditions to pay back the money owed.
Most of the times banks and agencies will offer the option to withdraw the monthly lump directly from your account and while you can say “no” to this option if you were to enter on a default process with them, they will take the money out of your personal reserves backed up by the law.
Ultimately the best way to handle the payments of a business loan is not related to the instruments offered by the bank to collect their money back. It all comes down to the discipline and responsibility that you are able to display to handle money, either for a personal loan or a business one.
- The Issues Faced when Payment Plans are not fulfilled
The cold heart truth with life and finances is that even with a good management of your money, you are still bound to suffer certain problems along the way. While banks tend to be a bit more understanding of your personal circumstances, Agencies don’t care too much about them, unless they have a reputation for being reasonable.
In any of these cases, you will be facing some level of harassment in the form of collecting calls and automatic withdrawals from your bank account. Interest rates become a concern at this stage since they will begin to snowball making your final debt even bigger unless you do the smart thing and negotiate a fixed rate when you get the loan.
Some lending agencies go as far as using lawyers and collecting agencies to contact your relatives to collect what they are owed, of course, this level of relentlessness is not displayed by everyone but is not uncommon to hear about it, especially if your grant is based on trustless means such as no-doc loans or low doc loans.
- The Consequences of Having a Poor Strategy with your Loan Payments
If you somehow manage to settle a debt after entering a conflict stage with a bank or a lending agency there will still be consequences to answer to in the aftermath of the episode. The most notable one is the fact that your credit score will be tarnished and decimated to the ground, closing the doors to any type of credit for at least 7 years.
You also be blacklisted by a number of financial institutions that have common agreements to avoid working with difficult clients. The extension of these measures could have lasting repercussions up to 30 years on your financial history depending on the amount of money you borrowed and were unable to pay. This is why it’s so important to take these loans with a clear course of action to avoid these types of problems.
As you can probably gather by now asking for a loan is a way to get help when you need it for your personal projects, but engaging these services also comes with a number of responsibilities that many people needs to be aware of to avoid endangering their financial position.