Fri. Dec 1st, 2023
quick cash loans

When you borrow money from either a person or a bank, you are under obligation to pay back that quick cash loans or any other loan as per the terms agreed between the creditor and the borrower. The borrower is bound by law to pay back the money with interest, failing which, the creditors can initiate legal proceedings to collect the sum. If you don’t make your loan repayments either in a timely manner or in full amounts, you will be at default.

If the borrowers do not have the money, then the creditor is allowed to sell off any property that you might have offered as a security even if the value of the asset is much higher than the loan amount. Secured assets could be anything ranging from jewellery to real estate. All secured assets are liable to be sold by the lender in case of defaulting borrowers.

Until the time your repayments are complete, you are not allowed to sell the secured assets. Only with the explicit permission from the lender can a borrower sell the secured property or items.

The options that a lender has when you decide to default

The sole aim of any entity providing short term loans is to recover the principal amount with interest. When you decide to default, there are multiple options that empower the lender to recover that pay day loan they provided you, which are as follows:

  • As per the National Credit Code, they can send notices to your residence asking you to pay up. You will be provided 30 more days to make the payment
  • Next the lenders are empowered to take possession of your secured asset, be it property or any item like car or jewellery. Before doing this however, you will be notified 30 days in advance.
  • In case the borrower is elusive, the lender does not have to notify 30 days in advance and repossess the asset offered as a security immediately.
  • When the borrowers refuse or hinder repossession, creditors can start legal proceedings by sending Form 2 and Form 16 at your residence.

What is the implication of all this? Will I be jailed?

In simple words, No. You will not be sent to jail for defaulting on your loan. Having said that, there are other serious implications which you should consider. Your credit score can have disastrous effects as it can reduce drastically.

quick cash loans

This will decrease your chances of getting a loan in the future at least at rates that are comfortable to pay. Losing your property and secured assets is another serious implication. People do end up losing their homes and estates in extreme cases.

Court summons are never a pleasant affair and you might end up finding yourself in the courtroom more often than envisaged. This can have an impact on your job or business since you will be losing work time. Although it is not mandatory but your employer could also can come in possession of information on your loan default status upon enquiry.

Whatever be the reason for your decision, defaulting on loans is never advisable nor a solution to your financial woes.