Loan debt is what?

To date, the lending area is activedue to mass demand. Making a deal does not take much time, but you need for this minimum of documents. But banking terminology is not known to everyone, so not many know what loan debts are. The concept is used when there is a loan debt. The absence of debt confirms the responsibility of customers, who are subsequently offered more profitable services.

Definition

Loan debt is the amount of funds,provided by the borrower to the bank on the basis of a loan agreement, the terms of which were not met. Debt is formed when payments are late. The amount will decrease when you return the money to the bank.

Net loan debt is the amount,granted to the borrower without interest, commissions, penalties, fines. All this is confirmed by the contract. Net loan debt is a receivable, which appears not because of the fault of the financial institution, but due to extraneous circumstances.

Types of debt

There are 2 types of debt:

• when the repayment time has not yet come;
• delay.

The latter also has a classification:

• expected;
• doubtful;
• hopeless.

Even if there is a loan debt, it provides an opportunity to pay the debt by the client. To this end, the bank offers restructuring, installment or deferral.

Terms and forms

There are 3 forms of debt, established for the period of payments:

• current: interest payment is delayed for 5 days, 6 days, up to 1 month, more than 6 months, or there is no delay;
• re-registered: there is a re-registration without changing the terms of the contract or with their introduction into the original document;
• overdue: includes a delay in the main debt up to 5 days, from 6 to 30 days, from 31 to 180 days, over 180 days.

How does it arise?

The deterioration of the client's solvency is affected by many factors. Even with a positive outlook, there are circumstances, due to which it is impossible to pay off the loan.

If the money is borrowed and not returned, thenthis is considered a debt. This may be due to loss of work, a decrease in wages, illness. There are a lot of reasons, but in any case, the debt must be returned.

Risks of banks

The work of banks is related to various financialrisks. This is operational, market, credit. A major threat to the operation of the institution is the non-return of funds provided to customers. A common cause of this is the illiterate policy of this sphere.

This is why banks control payments to theircustomers on loans and loans. The bank's cooperation with the client depends on responsibility and repayment of the debt. The amount of loan debt must be repaid on time.

Debt relief

Banks do not want to risk that customers do notwill be able to repay the debt. That is why all risks are minimized. But since you can not completely protect yourself from insolvency of clients, they have a reserve of loan debts, created from interest from other loans.

In rare cases, banks perform debt cancellation, usually in the following cases:

• a small amount of debt;
• the death of a borrower who does not have heirs;
• after bankruptcy.

Information about the debts in the bank are 5 years, and forthis time is monitoring the solvency of the borrower. If the client has an income, the lender encourages him to repay the debt. Borrowers should not miss payments or refuse to pay, as the law protects more lenders. If the money was taken into debt, then there will still be a recovery from the debtor.

It turns out that the loan debt does not includeinterest. The modern banking system functions in a coherent manner, so that lenders know how to reduce the risks of non-return of money. This should be taken into account for each borrower when making a loan.

Amortization

The contract specifies how the loan debt is repaid. Funds may be contributed:

• equal payments: they include principal and interest;
• differentiated payments: interest is accrued on the balance.

When choosing the order of payment of debt, one should take into accountall sum. An advantageous option can be calculated using a calculator. Having established the maturity, the bank does not have the ability to change any conditions. The payment payment scheme becomes updated with debt restructuring.

Account for debt repayment

With the issuance of a loan, the bank opens a loan account, through which various methods of repaying the loan are implemented. Its presence is necessary for:

• making payments in a non-cash form;
• receipt of account statements;
• making a link to the current account.

There are no commissions for the account. There are several forms of accounts, the type of which is determined by the contract and category of the borrower. After the repayment of the loan, you should take a certificate stating that there is no debt. Sometimes the account can not be closed due to unpaid additional services, and this negatively affects the credit history.

If you make payments through the bank's cashier, you canavoid additional fees. But then the funds are credited on time. Not all banks have cash desks in the evenings and weekends. It is convenient to transfer money through an ATM. Now there are other methods of replenishment: electronic systems, terminals, bank cards.

Timely payment of the loan makes the clientrespected in the bank. He will be provided with beneficial offers for low interest and flexible terms. Repayment of debt allows you to prevent many unpleasant events in life.

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