Loan Repayment: 5 Tips To Avoid Late Payment

Due to certain difficult circumstances, it is possible that a borrower may find it difficult to pay the monthly payments of his personal loan despite the fact that it was contracted with hindsight on his finances. To avoid worsening his situation, he must quickly adopt certain reflexes, because a late payment can indeed have unfortunate consequences, and even lead to sanctions.


Delayed loan repayment: beware of the consequences

Delayed loan repayment: beware of the consequences

In the event that the borrower delays in paying the monthly installments of his loan, the lender has numerous remedies. In the event that the monthly payments are not paid, the loan company will in particular add fees to the amounts due. If the delay in payment persists, the establishment will bear interest at an annual rate of 20%. In the event of formal notice, action, request, request and / or prosecution, the customer will then have to pay an additional amount equivalent to 20% of the capital due as damage.


Our advice to avoid late payments

1. Establish a provisional budget

1. Establish a provisional budget

To do this, collect the following documents:

  • Your latest pay slips.

  • Your receipts, due notice or invoices: water, electricity, landline and mobile phone, Internet subscription, insurance, vehicle maintenance, and your current loan repayments.

  • Your latest income and local tax notice.

  • Your account statements for the past 12 months.


2. Determine your resources

2. Determine your resources

Using the documents gathered previously, determine your resources:

  • Consult your current employment contract and your latest pay slips to determine the date and amount of your next salary.

  • Check your rights to social benefits.

  • If you are receiving a pension, note the amount.

  • Finally, note any other cash inflows that may occur.

Once the calculation of the total amount of your cash inflows has been made, you must then subtract all your expenses and establish your forecast budget, counting the repayment of your loan.


3. Determine your expenses

3. Determine your expenses

Fixed and unavoidable expenses that are payable on a regular basis:

  • Rent and cartoons

  • Mortgage repayment

  • Personal loan repayment

  • Water / Electricity / Gas

  • Telephone / Internet / Television

  • Home Insurance

  • Car Insurance

  • Health Insurance

  • Child care expenses

  • taxes

Current expenses:

  • Food

  • Personal hygiene

  • Medical fees

  • Gas / public transportation costs

  • Sporting and cultural activities

Occasional or optional expenses:

  • Exits

  • Clothing

  • Furnishings and household appliances

  • Vacation

  • Vehicle repair, maintenance costs


4. Analysis of your forecast table

credit loan

You must then analyze the forecast table in which you calculated your resources and expenses. If the balance is negative, you will need to be careful and cut back on some expenses to avoid late payments on your personal loan repayment.

  • If your final balance is more than $ 100

The amount of resources covers your expenses, your budgetary situation is good.

  • If your balance is between $ 0 and $ 100

Your budget is balanced, but your room for maneuver is low and you may be able to improve your budget further by looking where savings are possible.

  • If your balance is less than $ 0

You spend more money than you receive. Your budget is out of balance and you accumulate debts. You must restore your budget, reduce some expenses or, if possible, increase your income.


5. Negotiation as a last resort

loan Negotiation

To avoid the consequences of late payments and therefore the implementation of measures by the lending institution, be sure to inform the company as soon as possible in the event of financial difficulties, and this in particular from the first late payment. You will therefore have a good chance of benefiting from the assistance of an advisor to your creditor to solve the problem. With your advisor, you will surely be able to negotiate certain adjustments in your loan contract, while your financial situation returns to normal.