Sometimes unexpected things happen in our lives, and we’re forced to change our plans, including the financial ones. To carry out our daily activities, we need money, which may be obtained from different sources such as lending institutions. Money borrowed from any lender has to be paid upon the agreed period together with the accrued interest. So, as a borrower, you need to have plans in place on how to repay the secured loan together with the accrued interest.
There are times you may find that due to unavoidable circumstances, you’re unable to settle the loan before the end of the agreed period. So, what are the measures you need to take when your personal loan is overdue to prevent the situation from getting worse?
Go for a secured loan
With a secured loan, you can consolidate your overdue personal loan and get back on track. To have this kind of loan approved, you have to pledge assets as a security to cover the loan in case you default to pay. Failure to pay such a loan may lead to the loss of your assets. You need to make this move once you’re confident that you will be able to raise funds to pay the loan before the agreed period elapses.
Reach out to your lender
It’s necessary to reach out to your lender if you foresee difficulties in making payment for your personal loan. The lender may think of how to help you and can even choose to extend the agreed repayment period or exempt you from payments for several months. You may even have the opportunity to agree on how the remaining amount will be settled. Ask the lender if you can pay a certain percentage of the amount you owe them even though the loan is overdue and see if they can accept. If your request is accepted, you will be relieved from the struggle of raising the entire amount at once.
Make payments even it’s late
It’s good to pay your personal loan on time, but if you’re not a position to pay, it would be better to pay late than too late. Try to make the payment within 30 days after the due date, if possible. Such a move will preserve your credit rating because most of the default cases are n’t reported immediately. Failure to do so will have repercussions on your credit, and you may find it difficult to access loans from other lenders.
Choose the loans to pay first
If you are paying multiple loans from different lenders, you can think of ones to stop paying to facilitate the settlement of your personal loan that’s overdue. Such a decision is difficult to make as you have to consider the consequences that may result from failure to pay the other loans to finance your personal loan. Failure to repay your loan will damage your credit rating, and other lenders are likely to reject your loan application in the future.
Paying your loan on time is very important, but if you can’t, try the discussed above methods.