The importance of timely loan repayment can be judged through the problems that are created due to the missed/late repayments. Here you will find the problems related to non payments that give you inspiration to make timely loan repayment:
The first and the foremost consequence of late or missed payment are high penalties that can shake your financial budget in a very bad manner. Financial institutes are scheduled the particular amount of charges on delaying the repayment which has to bear by the borrower. In long term loans, financial institutes allow you to make delayed payment 1-2 time but of borrower continue to do so they send them the notice that includes the heavy penalty that have to pay by the borrower along with loan installment. So, you must understand that making timely loan repayment is important to avoid these heavy penalties that can ruin your financial life very badly.
• Legal Proceedings
In case, the borrower does not pay the loan repayment due to any personal reason than it can lead to legal proceedings which will bring multiple of problems in the life of an individual. Lenders got the right to take you to the court to recover their money if you don’t pay your loan. Do keep in mind that a court can give permission to the lender to garnish your salary till their money will be recovered. This judgment can bind you in a very tight financial situation. In case, you disown the court's judgment then you will face major other consequences.
• Repossession Of Your Property
This is the major factor that can influence you to make timely repayment. You might know that in securing loans your property placed as collateral can be repossessed by the lender if you don’t pay their amount back on time. They may allow you to pay late payment but if you start missing their repayment than got the full right to take possession of your asset and sell it to recover their money. It is very important to understand in unsecured loan lenders might don’t have any right on your property but if their amount is high then they can take you to court and ask for your assets possession to get a recovery of their loan.
• Affect Your Credit Report
It is the key factor that helps you to understand the importance of timely repayment and the consequences of late or missed payments. Credit report of an individual reaches the sky high credit score if you make timely payment which helps you in many areas of your life. But in case your payment will be delayed or missed then this score give you the tag of bad credit borrower which will bring multiple problems like denial in loan application when you need next time or small loans with high interest rates. Loan repayment puts affect your credit profile in a bad or good manner as per your repayment style.
The above mentioned points not only tell you the consequences of the non-payments but it also helps you to understand the importance of timely loan repayment.