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Important Tips

Important Information to consider

Avoiding adverse action for your repayments - on collection practices

Once your finance has been approved, you receive your installment loan amount for repayment. You then consider the implications of paying it back, deciding that you may, for whatever reason, be unable to repay or meet the arranged repayments of your loan, or any part thereof, you need to immediately and directly contact your loan provider.

Immediately contacting your loan provider may give you the timely opportunity to reschedule or discuss different options for your repayment to avoid adverse action against you.

Rescheduling or opting for different repayment methods with your loan provider may incur more or further costs and/or interest. Therefore, you should discuss these details directly with your loan provider. However, suppose you do not attempt to contact your loan provider and update them on your circumstance or changes you have to make due to difficulty paying your repayments. In that case, the loan provider reserves the right to pass your case (along with your details) to a third-party debt collector/agency/organisation, who will attempt to recover your loan repayments debt.

Loan providers reserve the right to use a "Continuous Payment Authority" to repeatedly attempt to lay hold of payment from your credit card - at least up until 90 days over your due repayment date. A "lay hold of" may only be done if it is in line with your loan terms of the agreement.

Implications of non-payment

Implications of non-payment for your loan repayment could include adverse details being incorporated into your credit report. Adversely, this could affect your future attempts for a loan or other financial applications, as well as additional charges being added to your loan by your loan provider.

A completely missed payment will incur a penalty fee, usually added to the total owed loan. Upon this missed payment, loan providers will try to contact you directly, by phone or in writing, to try to recover their funds, or they may discuss possible repayment options or dates with you. If you definitely cannot meet the repayment agreement, or if you know that there is a possibility of not meeting your repayment agreement, we recommend that you contact your loan provider immediately.

Important details to take note of and to remember

  • Taking out a loan is not advisable if you know you will not be able to commit to paying it back
  • Contact your loan provider immediately if you have any doubt about being able to pay the loan back

To avoid your loan provider needing to report you for late or non-payment of your loan to a "Credit Reference Agency," - upon the agreed date of payment between yourself and your loan provider, and to avoid a negative effect on your credit score, you need to repay your loan on the stipulated (agreed upon) date. Harming your credit score may impact your ability to apply for future credit for mobile phone contracts, car finance, mortgages, etc. In addition, if you default on a payment, you could be charged a collection fee (fees vary between loan providers), and your loan provider may even add interest on your outstanding balance, usually at a rate payable under your agreement terms.

You will have to pay your loan provider all reasonable but agreed upon costs incurred in their undertaking to enforce or the steps taken to enforce, such as via a County Court Judgement, to your loan provider as it is their right to do so under your agreement.

Renewal Policy for your installment loan

There may be lenders that will allow you to renew an installment loan or accept your application for other installment loans and grant you credit. However, It is not advisable to apply for an installment loan, or any other type of loan, if you already have outstanding loans and are struggling with making your contractual repayments.

The most important thing to consider is the reason for applying for a second loan or loan renewal and whether you will be able to afford to pay it back on time, every time, throughout the whole agreement.

If you are borrowing money to pay back another loan, it is not a good idea to apply for further credit. However, if you are struggling with loan repayments or have fallen behind, it is always good practice to notify your lender in the first instance.

If you haven't managed to work something out with your lender directly, you may seek information, help, or advice from your local Citizens Advice Bureau.