Implications of Non Payment
Lenders follow their own principles and policies regarding fees and interest if you don’t pay on time. While most of them will contact you by phone or letter to rearrange payment, remember that non-payment can lead to extra charges and increased interest rate which eventually affects your credit score. It’s important that you read the lender’s website’s charges section before finalising the loan.
Lenders usually contact you by phone, email or letter to arrange payment as non-payment can lead to charges and higher interest rates affecting your credit score. There is the possibility of your debt being passed on to a collection agency and consequent further charges with continued non-payment.
Make sure you contact your lender well before your repayment date if you plan to renew your loan. You will most probably be charged the same rate of interest and fees for the next month on the entire loan amount. The loan renewal/extension is automatic and leads to more interest and charges to your account in the event of a non-payment.
Frequently Asked Questions
Is the entire application carried out online?
In many instances, yes. Of course, there can be some instances where some documentation may need to be sent in, but for the most part, validation can be carried out online.
How do I make repayments on a loan?
While different lenders will provide different payment options, it is often the case that a Direct Debit is setup to collect payments. However, applicants can be confident that all aspects of the loan will be explained beforehand, including the repayment process.
How much will I be able to borrow?
The amount that a lender will offer an applicant can vary based on many factors, such as their term of employment and any current credit commitments. Lenders generally offer personal loans from £300 to £5000, but will use the information given to ensure they are lending money responsibly.
How long will it take to repay the loan?
The term of the loan can vary. If you're only borrowing £300, then it's likely this will be paid much quicker than a larger loan of £5,000. Lenders will ensure you're happy with the terms of the loan before finalising the application, but as a guide the terms can vary between 3 and 18 months.