The worst possible solution is to wait and count on the fact that the bank will not notice … Well, it will notice for sure, especially since currently loan installments are usually repaid automatically from the debtor’s account. Failure to pay the current installment will result in the company being reminded of the arrears and setting the next repayment date.
The debtor will, of course, be charged the cost of such a reminder, usually on the order of several dozen us dollars. Further lack of response will trigger the debt collection procedure and place the debtor in the Credit Information Bureau, which will be a source of further problems for the company. So what should you do to avoid potential problems?
Play open cards with the bank
If you expect problems with repayment, please inform the bank. Maybe together with a credit counselor you can find a solution to the problem (postponement of installment repayment, grace period or loan holidays). The financing institution receives a clear signal that we do not run away from the problem and are looking for a way to solve it. The range of available solutions depends largely on the conditions under which we took out the loan. If we have the option of taking into account, e.g. credit holidays (suspension of installment payments) in the contract, we can use it at the time of liquidity problems.
If the loan agreement does not provide for a grace period or loan holidays, we can of course still apply for one of these solutions, but we are dependent on the grace and disgrace of the officer examining our application.
Insurance can help
Before you get in trouble, you should think about securing your loan repayment. The standard insurance covers situations in which a person running a business loses his ability to service debt, e.g. due to an accident, hospital stay or death. Even if none of these circumstances apply in our situation, it will be an additional argument for the bank in favor of “getting the debtor on hand”.
A positive history of cooperation with the bank, regular repayment of liabilities and regular inflows to the account will also work in our favor.