Today, the banking industry is activeDevelopment due to mass demand. Registration of the transaction does not take long and you need a minimum of documents. However, banking terminology is not known to everyone, so not many people know what loan debt is.
The concept is used when the loan contains loans. A lack of debt confirms the responsibility of customers who will receive more profitable services in the future.
What is loan debt?
Loan debt is the amount of the borrower provided by the bank on the basis of a loan agreement, the terms of which have not been met. Debt is created in the event of late payment. The amount will decrease if you repay the bank’s money.
The net debt is the amount made available to the borrower without interest, commissions, penalties, fines. All of this is confirmed by the contract. Net loan claims are claims that do not arise from the fault of a financial institution but from external circumstances.
Types of debt
There are two types of debt:
- if the time of salvation has not yet come;
The latter also has a classification:
Even if there is a loan debt, there is a possibility that the customer can pay the debt. The bank offers restructuring, installment payments or deferral.
Terms and forms
There are three types of debt that were set during the payment period:
- Current: The interest payment is delayed by 5 days, 6 days, up to 1 month, more than 6 months, or there is no delay.
- Reissue: Reissue takes place without changing the contractual terms or their entry in the original document;
- Overdue: includes a principal debt delay of up to 5 days, 6 to 30 days, 31 to 180 days, over 180 days.
How does this happen?
The deterioration in customer solvency is affected by many factors. Despite a positive outlook, circumstances appear that make it impossible to repay the loan.
If you borrowed money and have not been returned, this is a debt. This can be due to job losses, lower wages and illnesses. There are many reasons, but the debt must definitely be returned.
The work of banks is associated with various financial risks. These are operational, market, credit. A major threat to the institution’s activities is the failure to return funds that are made available to customers. A common reason for this is the illiteracy policy in this area.
That is why banks control their payments to customers for loans and loans. The bank’s cooperation with the customer depends on the responsibility and repayment of the debt. The loan debt must be repaid on time.
Banks do not want to risk that customers will not be able to pay the debt. Therefore all risks are minimized. However, since it is impossible to fully protect yourself from customers’ insolvency, they have a provision for loan debt created by interest on other loans.
Banks rarely write off debt, usually in the following cases:
- small amount of debt;
- the death of a borrower who has no heirs;
- after bankruptcy.
Debt information in the bank is 5 years old, and this time the borrower’s solvency is being tracked. If the customer has an income, the lender asks them to repay the debt. Borrowers should not skip payments or refuse to pay because the law protects lenders more. If money has been borrowed, it is still a recovery from the debtor.
It turns out that loan debt does not include interest. The modern banking system works smoothly, so lenders know how to reduce the risk of not returning money. This should apply to every borrower when you take out a loan.
The contract specifies how the loan debt is repaid. Means can be made:
- Same payments: They include principal and interest.
- Difference payments: Interest is paid on the remaining amount.
When choosing the payment order, the entire amount of the debt should be taken into account. Advantageous option can be calculated with a calculator. Once the repayment period has been set, the bank has no way to change the terms. The payment schedule is updated with the debt rescheduling.
By registering the loan, the bank opens a loan account through which various methods of loan repayment are implemented. Your presence is necessary for:
- Make payments in cash;
- Receiving bank statements;
- Binding to the current account.
There are no commissions for the account. There are different types of accounts, the type of which is determined by the contract and the category of the borrower. After repaying the loan, you should take a certificate that there are no debts. In some cases, an account cannot be closed due to unpaid additional services, which has a negative impact on the credit history.
When making payments through the bank’s cash register, you can avoid additional costs. However, the funds will be credited in good time. Not all banks have cash registers in the evening and on weekends. It is convenient to credit money through an ATM. Now there are other refilling methods: electronic systems, terminals, bank cards.
The timely payment of the loan makes the customer love in the bank. He receives lucrative offers at low interest rates and flexible conditions. By repaying debts, you can prevent many unpleasant events in life.