Difficulties in loan repayment do not have to be due to negligence or poor budget management. Life circumstances and a sudden change in a financial situation often affect this. Instead of running away from the problem and exposing yourself to the severe consequences of late repayment, you can use the roll-over loan service. What is it about and is it safe?
Rolling loans – what’s up?
Non-payment of loans is a heavy burden for non-banking companies. For this reason, they are trying to suit clients and make it easier for them to settle their debt in a conciliatory way.
One option is to roll over the loan, i.e. to postpone its repayment date. What does this mean for the borrower? It may extend the period for settling the liability, thereby gaining time to accumulate adequate funds to cover the debt.
How does rollover loans work?
When the repayment date is approaching and the debtor has no money to settle the loan, he may request a deferment. Lenders usually allow the extension of the deadline by 7.14 or 30 days. One-time rollover of the loan can be a profitable solution, however, remember that there are additional costs involved.
Continuous extension of the repayment deadline is a simple way to generate large debt that may not be repayable. In that case, how much does a rollover loan cost? It depends on the non-bank company and such a provision should be in the contract. It is worth remembering that not every lender offers this option.
Loan roll-up under the law
The high costs associated with extending the deadline have caused many people to fall into a serious debt spiral. The introduction of the anti-usury act has somewhat curtailed the practice of dishonest lenders, limiting the cost of extending the term to a maximum of 25% of the loan value.
For this reason, despite the fact that still receives notifications about usury repayment terms, they constitute a small percentage of the cases handled.
Refinancing and rolling out a loan
An alternative to extending the repayment deadline may be a refinancing service. It involves incurring another liability to repay outstanding debt. What is the difference between these two services?
It is worth remembering that refinancing a loan may depend on your creditworthiness. In the event of an unfavorable history in Credit Checker, another lender may refuse to grant a new payday loan to pay off outstanding liabilities.