Let’s talk loan default. 

Do you find yourself falling behind your loan repayment schedule? Do you at times pay less than the agreed amount? If yes, then in those instances, you are in default. When you delay or fail to make your loan repayment as scheduled, you are in default. Ask yourself why you fall behind schedule? Have your circumstances changed either in respect of your income or any other issue? If your financial circumstances have not changed, is the default purely a result of your financial or credit indiscipline?

Default exposes a borrower to legal claims or limited access to credit in the future. Default on secured loans may jeopardise the collateral used and the credit rating of a borrower also gets degraded on default which may cause reporting to the regulators and consequently lead to declined loans by other creditors.

If your financial circumstances change and you are not in a position to meet your loan repayment obligations, you have options to consider. You can renegotiate, seek restructuring, moratorium or re-schedulement/deferment of repayment. If you need guidance on what direction to take in case of change in your financial circumstances, consult an expert who can help you formulate a proposal for consideration by your creditor. Do not wait for your creditor to look for you or follow you. 

Make wise credit decisions at every step of your credit journey!