What happens if I am unable to pay my bank loan?

Sometimes problems may crop up and you find yourself not able to repay a loan. If you see that it will be so hard to make the payments, it will be very advisable to take an action as soon as possible. Taking a quick move will help you in lowering down the damages that you may cause to your finances. Preventing this from becoming worse will help you in reducing more stress ahead of you. Things may not be so easy for you but it will be good to try several things.

If you are unable to pay

It will be so great if you start by talking out this issue. Not paying a loan means you may default the loan at the end and this will result in penalties, fees and higher interests from the banks. It will also lead to the downfall of your good credit scores. But do not worry as your credit score will still go back to normal if you start rebuilding it again. Also, you should check 4 reasons you should avoid payday loans

As you still have time before the next payment, you may be able to take action before this happens. There are a number of options that you will still have:

  • You can make the payment late. It is good to make a loan payment on time, just try paying late as it will be better than not making the payment at all.
  • Try consolidating or refinancing. Using a different loan might make you better off. Trying a new loan can give you more time for repayment. It is good to apply for unsecured loans. Online platforms like fast cash loans South Africa can be of great help. Try applying these loans as YOU minimize the damages to your credit score. 
  • Try using secured loans
  • Make sure to communicate with the lenders. You lender may have options that will really help you if you talk to them. They may think of allowing you to skip the payments for some months or even try to change your date.
  • Make your payments the priority. Choose wisely on how you will try making a list of your payments.

If it is a federal student loan you borrowed, you may have a number of options to use:

  • If you manage qualifying for a deferment, you may stop making the payments temporarily. This will allow you time to get back on your feet.
  • People who don’t qualify for deferment can try income-based repayment. It is designed in a way to keep the payments affordable.

You may also try to get help if you see that you really have a big problem repaying the loan. You may try:

  • Credit counseling which can really help you in understanding the situation and coming up with great solutions.
  • Bankruptcy attorneys may also be of great help. However, do not be so surprised because they may tell you to file for bankruptcy. This may also solve your problems.
  • You may also need to involve public assistance.