Problems paying your loan installments?On June 16, 2019 by Arthur Perry
On these dates it can be read in some specialized journals that the delinquency rate of some financial institutions is increasing, that is specifically due to the delay or non-payment of the debts of those people who requested a loan.
Generally when someone applies for a loan, they always have a sufficient source of income to support the payment of the fee; Within the documents and evaluation requested and made by the bank, it also places a lot of emphasis on that point. The problem occurs when a fortuitous event or an increase in expenses means that the payment of fees cannot be fulfilled, be it one or more; The theme of this post is what alternatives we have before, during or after this situation.
Let’s put ourselves in a typical case where I have a debt of 10,000 soles at 36 months with an interest rate of 16% and a monthly fee of 346.33 soles, let’s not consider other expenses to simplify. I am paying 12 installments for what I still have to pay 7,147.72 soles, at that time I have a hard time paying the next installment.
What should we do?
The first of all is to assess the situation, see if this is a passing issue or if the problem already covers a long period that affects our source of income for payment. Let us take into account that this is important because a short-term solution must be chosen to save 1 to 2 installments, or on the other hand vary the entire payment schedule to adjust the installment to a more manageable new one. It is important to have as much time as possible to be able to take an action without falling into arrears.
Faced with a short-term problem of one to two installments
Given this situation we must find a way to get rid of the payment for the couple of months where the problem exists. Taking the above data to better explain this, I still have 7,147.72 soles and I have 24 months to pay; I have the problem this month, the alternative is to find another bank to finance that balance, so that the new loan pays the previous one and that way we get rid of that month’s fee; If we do the calculation well, we can get the first installment of the new loan to be after 45 days and thus gain time to recover.
What to do if the fee has become too high for what I can pay?
This can occur when we have suffered a decrease in our income or a new unforeseen expense has been included, in this case it is better that we modify the entire payment schedule in search of a lower fee.
As a solution we take the previous option but instead of negotiating for 24 months that we lack, we can take it to 36 months and we would achieve a fee of 247.55 soles; With this we will have a period of 1 month of respite before the first installment and pay 100 soles less.
The negative of this method is that we extend the debt and with it the interest paid during the entire operation.
The ideal is always to pay the debts in the shortest possible time and thus save the greatest amount of interest, so whenever it is possible to prepay them and in this way we can or reduce the fee or the term.