Missing Loan Payments Can Have More Consequences Than You Think
When borrowing from a financial institution, borrowers should make repayments on time. Missing or failing to make a payment can have several consequences.
- Higher costs
A missed payment may result in additional costs, including more interest. If the payment remains overdue beyond the specified period, default interest and debt collection expenses may also be charged.
2. An adverse repayment record
A record of late or missed payments may make it harder to obtain credit in the future. Financial institutions may review repayment history through the National Credit Bureau, which records monthly repayment information. The article stated that such information remained in the database for three years.
3. Legal action
If a debt remains overdue for a long period, the financial institution may bring a civil claim to recover it. In a severe case, a court may declare the debtor bankrupt.
Repayment discipline is therefore an important part of responsible borrowing and can help prevent these problems.
