Consequences of default of payment
If you fail to repay your loan, the lender may charge an interest on late payment, as laid down in the credit agreement, cancel the loan, request the repayment of the outstanding balance in one instalment, take back the items purchased with the loan or impose other penalties.
An unpaid loan may result in a default entry, which will make your life difficult in many ways. You may be unable to take out new loans or get a credit card and you cannot conclude hire purchase agreements. You may also face problems when trying to get a rental flat or a job or open a mobile phone connection.
Contact the lender if you are unable to repay your loan
If you are unable to repay your loan by due date, you should contact the lender and agree on a new repayment date or a new repayment plan.
A consumer may be charged a maximum of 5 euros for the extension of the repayment period before the due date on the condition that the repayment period is extended by at least 14 days. However, the total amount of the fees charged for such measures may not exceed 20 euros each year. The maximum amount of the fees charged for the extension of the repayment period is also limited after the debt has become due.
You may also ask the lender to grant you an instalment-free month. During the month in question, you need to pay the interest but you are not required to pay any loan instalments. An instalment-free month is often less costly than taking out a new loan.
If you reach agreement on an instalment-free month with the lender, you should also try to agree on a repayment arrangement that is best suited to your needs. An example:
- you pay two instalments in the following month;
- the outstanding balance is distributed over the remaining payment period;
- the repayment period is extended.
Check how the shortening or extending of the repayment period would affect the monthly instalments. Compare the monthly instalments with your available income and choose the option that is best suited to your needs.
More loans you have, more expenses they generate. You should discuss the combination of small loans into a large loan with your lender. This allows you to save credit costs. Seek help for your debt problems If your debts continue to accumulate, you should contact the financial and debt adviser before it is too late. Advisers help, for instance, with mapping out the financial situation and negotiations with debtors.
Financial and debt counselling