In daily life, late payments happen, whether it is a credit card, a loan, or other debts, may not be able to be repaid on time due to various reasons. And after the deadline, there are 4 things that are unavoidable.
First things first: incur penalty interest and liquidated damages.
Once a payment is overdue, the bank or lender will immediately start calculating penalty interest and liquidated damages. Penalty interest is calculated according to a certain percentage of the overdue amount, usually about 5/10,000 per day, while liquidated damages are calculated according to the number of overdue days, generally ranging from 5% to 20%. These penalty interest and liquidated damages can increase over time, increasing the burden on the repayer.
The second thing: a damaged credit history.
Late payments can cause significant damage to an individual's credit history. Banks and lenders assess a borrower's credit profile based on overdue records, and if the overdue period is too long or too many times, the borrower's credit rating will be greatly affected. This will not only affect the approval of future loans, but also affect daily life, such as renting an apartment, finding a job, etc.
The third thing: being collected and prosecuted.
Once the overdue time is too long or the overdue amount is too large, the bank or lending institution may take collection measures, such as urging the repayer to repay the loan as soon as possible through **, text messages, letters, etc. If the repayment is still not made after collection, the bank or lender may choose to sue the repayer to recover the debt through legal means. This will have a big negative impact on an individual's credit history and daily life.
The fourth thing: lack of access to financial services.
If an individual's credit history is severely damaged, it will affect future financial services. For example, banks may not approve applications for financial services such as personal loans and credit cards, which may even affect an individual's investment and wealth management in the financial field. In addition, some public services will also be affected, such as buying insurance, applying for mortgages, etc.
To sum up, late payments can have a significant negative impact on an individual's credit history, daily life, and financial services. Therefore, it is recommended that everyone pay attention to planning and managing their debts in daily life, and avoid overdue repayments as much as possible. If you do have a late repayment, you should also take steps as soon as possible to make up for your mistakes and minimize the damage to your credit history.