What happens if I can not pay loan installments?

The fact that borrowers can no longer pay their repayment installments is unfortunately often the case. Reasons for this are job changes or loss, illness or poor planning. The banks know this problem very well and are even interested in the borrower paying off his debts.

Therefore, the first way should always be to seek the conversation with the lender. Many banks are willing to compromise and open to reducing the monthly burden. But if you put your head in the sand and ignore payment requests, you run the risk of the loan being terminated. Therefore, early communication is the most important step in dealing with financial distress. And even without imminent dismissal, the situation can be defused by talking to the bank’s client advisor. Lower rates or payment pauses can relieve the borrower. In around 95% of all cases there is a solution that satisfies both parties. The alternative to this are written reminders, which drive through the dunning fees, the total debt in the air.

Another possibility is the rescheduling. Especially in times of low interest rates, debt rescheduling can be a cost effective alternative to existing loan contracts. A credit comparison helps to find out whether the burden and perhaps even the total cost can be reduced in this way. Anyone who pays off one or several long-term loans should consider this possibility anyway. However, this may result in prepayment penalties for existing creditors. In this way, the overall cost of the retraining loan may increase so much that the financial benefit is offset.

If the conversation with the bank fails, or if there are too many uncertainties, the debt counseling service can help. Just when multiple borrowers are demanding their money and the borrower has lost track of it, a debt counselor can help find a way to get the finances back under control. Even if it takes over to seek help, this is the only way for many people to become debt free again. The earlier the debt counseling is sought, the easier it will be.