What if I can’t pay my sms loan?

A sms loan can be a quick way to solve a temporary financial predicament. But what happens if you are unable to pay off the debt within the agreed loan term?

The name is heard on the fact that quick loans should be repaid within a short period of time. A classic quick loan is on sums of USD 1,000 – 10,000 and is usually amortized in 30-90 days.

The most common is a payback period of 60 days. This means that you have about two months to settle your debt and repay the effective interest rate.

A common “early warning” regarding fast loans is therefore to absolutely not borrow money unless you have a clear repayment plan.

Postpone payment?

Some credit companies offer the opportunity to postpone the payment. For a fee. This may sound good, but such a service is often very expensive and increase the total loan cost

Of course, it is better to postpone the payment than to end up with the Debt Collection or the Chronicle. But it is important to understand that this is not a “method” used by credit companies to be kind.

On the contrary, it is an expensive measure that you should only use when there are no other means.

Reminder and debt collection

If you do not pay your repayments under the loan agreement, you will first receive a payment reminder. Often, this invoice also includes a reminder fee and any delay interest. The amount of these fees varies between different banks. The statutory reminder fee currently stands at a maximum of USD 60 per invoice.

Section 4 The debtor’s liability under $ 2 and 3 applies only to costs that have been reasonably claimed to exercise the creditor’s right.

Compensation shall be paid, unless there are special reasons for otherwise, with a maximum

1. sixty USD for written payment reminder referred to in section 2,
2. one hundred and eighty USD for claims referred to in $ 3,
3. one hundred and seventy USD for the drawing up of the amortization plan referred to in $ 3 2 Act (2013: 56).

Debt collection and the Chronicle

If you are unable to pay a reminder, your case is forwarded to Debt Collection – alternatively, the credit company sends your own debt collection claim. In normal cases, you will receive an additional invoice, from the Debt Collection Company, which asks you to pay your debt, as well as the collection fees imposed.

If you do not pay the debt collection case, the case goes to the enforcement authority . These inform you first about the size and nature of the debt. If you do not want to receive a payment note, it is extremely important that you pay the debt directly.

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