Remember the last time when you didn’t write your timely check to pay for the repayment of loans availed? Not paying your dues puts you in the category known as bad debtors. Ever considered what are the drawbacks of being labeled a bad debtor? While you will not be burned at the stake for this gross mistake, there are other unpleasant fallouts of this act. For the most part it will be difficult to get a second loan. The truth is their credit history shows poorly in national and state level records and they often find themselves in tough water when acquiring another loan. Does that mean a bad credit cannot obtain a loan?
Of course, they can. But the next loan will include some serious statutory warnings. A bed debtor becomes a high risk borrower for the lending out company and hence, the terms for fixing and dealing out in such loans are tougher and stricter. Agencies giving out loans to bad debtors:
A complete background check is conducted b. also sets up a higher interest rate with tougher norms on unsecured personal loans.
Sometimes agencies are merely what Nigerian guys are over the internet, a scam. Conduct a background check of credit companies as well to ensure you do not end up getting tangled with legal issues later on.
Bad debtors with good collateral will be able to get secured loans unlike others who have to settle for unsecured loans. Collateral refers to some property or other kind of fixed asset which may used as security to avail a loan. Be warned that you will easily be stripped of rights to the collateral if you cannot make good on your payments.
Bad debtors are generally saddled with higher interest loans and tougher loopholes. When using collateral remember to make all your payments without the slightest delay. Many unscrupulous agencies thrives in this inapt phenomenon and can in return further cause you grief and mental trauma.