Moolr always take a customer’s personal circumstances into careful consideration before offering finance. Failing to make loan repayments is not something anyone wants to encounter. We make it clear that anyone looking to borrow money, whatever the circumstances, is comfortable in doing so. The terms of a prospective loan should always be looked at thoroughly. Borrowers should always calculate that they are in a position to make regular repayments before committing.
Nevertheless, none of us can predict what is around the corner. Circumstances change, and sometimes people struggle to meet their commitments. With that in mind, Moolr have taken a look at the consequences of failing to make loan repayments.
What happens if I can’t make repayments on my logbook loan?
At Moolr, we appreciate that circumstances change. Thus, even though we always advise that you only take out a long term loan if you are fully confident of making the repayments, but appreciate that occasionally people will struggle to do this. There are various reasons this could happen, from losing a job, to unforeseen extra costs.
This is why we explain the various procedures and consequences if you cannot repay your loan on time. Lenders will take repayments from your loan automatically from your debit account on the dates agreed between you and the lender. Normally, lenders will contact you by text message or email when repayments are upcoming, and if you miss a payment, then they would make further contact with you.
Failing To Make Loan Repayments: The Consequences – Be Proactive
If you know you will miss a payment, do not turn a blind eye to the situation. That is the worst thing to do. Contact the lender immediately and try and arrange a solution. Unfortunately there may be extra charges for missing a payment, but that depends on the terms and conditions of your particular loan.
The impact on your credit score
As with many loans, the lender is likely to run a credit check during the application process. Hence, failure to make the repayments on the loan may have a negative impact on your credit file. A missed payment will be sent to the credit agencies, and will thus appear on your credit report. Unfortunately this can remain on your report for up to six years.
On the flip side, regular payments will help improve your credit rating as it will show to potential lenders that you are a trustworthy borrower. Failure to make loan repayments can hit your rating but it can be repaired. This is especially useful as those that have struggled to get credit in the past have not been able to repair their rating, as they are caught in a vicious circle.
However, it should be pointed out that you should never take out a loan simply to attempt to repair a credit rating.
Failing To Make Loan Repayments: The Consequences – Extra fees
Failing to make a repayment on time will usually incur a default charge of up to £25 (though often £15 initially) and further charges for any defaults thereafter or extra correspondence that has to be sent out. If you do not respond to any of the calls, emails or letters, an agent will be sent to your house to discuss repayment and there is also a call-out charge for this. It is very important to understand the added costs involved if you do not meet repayment, and for this reason it is important that if you are struggling to make a repayment then you contact the relevant lender to try and rectify the situation, which may involve a revamped payment plan.
