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Consequences of Non-Payment of Short Term Loans:
It is always recommended and expected that you repay your loan back on time. In case of non-payment the policies of every lender regarding fees, interest and collection of outstanding debts etc. vary considerably. If your payment schedule needs to be re-arranged, most lenders will contact you via phone or letter. Non-payment will prompt penalties such as extra charges or increased interest rates. In the event that you will not be able to pay back your lender on time, then you must contact your lender immediately. Failure to do so may result in your credit file being adversely affected.
You can directly contact the lender in case of any delay or problem you might be facing pertaining to the payment process. This way, you can discuss all the available payment options in detail. If the issue cannot be resolved, then the lender has the authority to pass on your information to a third party collection agency.
If you cannot repay your loan on time you may be charged a late-payment fee by the lender ranging between ￡1 and ￡100. The fee completely depends upon the lender’s policy. To learn more go through your loan agreements terms and conditions very carefully.
To renew your loan, you need to contact your lender beforehand. Most lenders do not increase the interest and fees rate on the entire amount for the upcoming month. If a non-payment issue occurs, then your loan will be automatically renewed or extended but in this case, your lender may have the right to increase the charges and/or interest rate.Short Term Loans Warning: Late repayment can cause you money problems. For help go to moneyadviceservice.org.uk or you can contact your local branh of the CAB or alternatively log on to Direct.gov