Loan

What Are Your Options When You Can’t Pay Back Your Loan?

If you find that you are not able to make your loan repayments in time, you should explore what you can do to lessen your financial damage before it becomes impossible to clean it up. If you don’t pay, you will be declared a defaulter and the total sum outstanding will zoom as to the interest, fees, and penalties accumulate. Your credit score will take a massive hit, and you may even need to file for bankruptcy. So, what are your options?

Make the Payment Late

If you are not in a position to make the due payments in time, consider paying late after saving enough. If you manage to pay within 30 days of the due date, you will generally find that credit bureaus are not informed about the late payments. This means that your credit score does not take a hit and you can seek refinance or consolidation without worry.

Refinance the Debt

Missing out on making credit card payments creates problems mainly because the outstanding amount piles up fast due to the application of high rate of interest and penalties. Seeking refinance for all card dues and personal loan balances from a financier like http://libertylending.com/ will allow you to take the benefit of a lower rate of interest and also make your monthly payments more affordable by extending the repayment period.

Securing the Loan

You tend to get far better terms and conditions if you are in a position to secure your new loan by pledging an unencumbered asset. However, the downside is that you could lose it if you default on the payment. This means that if you have staked your home, you could be left without a roof over your head at a time when you don’t have any savings. Even losing your car could prove to be very inconvenient as it may hamper your income.

Negotiate with Lenders

If you anticipate having trouble with making payments due to some life-changing events like a job loss, a divorce or a medical emergency, you should discuss with your lenders who could then allow you a repayment holiday, reduce the rate of interest or even agree to settle the due for substantially less. However, debt settlement is successful only when the lender feels insecure enough to think settling for less is better than getting nothing from a client who’s broke. The credit score will get negatively impacted when you undergo a settlement.

Payment Prioritization

If you are certain that you don’t have enough to pay all the monthly payments required, you need to decide which debts to stop paying off. It is usually wiser to keep paying the secured loans to avoid losing your assets while the unsecured ones can be stopped. While you will end up damaging your credit score, you can minimize the disruption to your life.

Conclusion

 

When experiencing financial distress, it is best to try debt restructuring by refinancing or consolidation. Remember stopping, deferring or settling debts can injure your credit score and affect your borrowing power.

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Dealing Successfully with Small Business Debt

Often businesses are known to be struggling under overwhelming debts. Taking the correct amount of debt, that too, at the perfect time, could make all the difference between a successful business and a business that is struggling for survival.  As per statistics provided by the SBA (U.S. Small Business Administration) about 50% of small businesses tend to fail during the initial five years predominantly because of lack of capital, overwhelming debt, and poor credit arrangements.


Most businesses would be looking for loans for fortifying their cash situation, for bolstering financial growth and funding expansion plans. However, the past few years have been extremely critical and difficult for small businesses that ended up borrowing excessively without having the capability of making back what they actually owe. These struggling organizations could have survived the economic recession, had they taken a well-informed and sound borrowing decision in the initial stages. However, there is no scope for retrospection once creditors and debt collectors are after you.


In such a financial crisis situation, the small business owner is left with two options for effectively dealing with debt. The business owner may make all efforts to save his small business by trying his best to settle all outstanding debts or accounts. The other alternative is to let his small business fail of course, with an appropriate exit strategy which would be minimizing or mitigating financial consequences.


Save Your Business

The first choice for the business owner is obviously to try and save his business by using money from his own personal funds and diverting it to his own business. This seems to be a calculated risk which till date has failed an equal number of times as it has tasted success. You could choose this solely as a short-term strategy which promises chances of a long-term repayment of the outstanding debt.


Reduce Costs

If you are not in a position to get rid of the business debt by using private funds, it is essential to identify and determine relevant areas where you could do some effective cost-cutting. May be you could consider subleasing unused space or selling off spare equipment. Even though, shrinking your workforce may not be a desirable option, you may need to do that for keeping your business afloat.


Contact Suppliers & Customers

Keep in touch with your customers. Offer attractive markdowns to top customers if they are able to pay you fast. Contact your suppliers and request them for deferred payments and even discounts if possible.


Get in Touch with Your Creditors

The  best debt relief option in case of multiple debts is debt settlement. Try connecting with your debt collectors or creditors and explain to them your predicament. Request lenders to accept lower interest rates, restructure all the existing repayment options, or boost your line of credit. If multiple collection agencies or creditors are running after you, nagging you via phone calls, and taking you away from operating your business seriously, you could get in touch with a legit debt settlement company. They would be negotiating effectively with your creditors for settling all your debts for an amount that is definitely lower than what you had taken out as a loan.


Consolidate Your Loans

You may opt for debt consolidation. The process involves consolidating all your business debts into one single loan and payment that would cut down monthly expenses without impacting your credit score negatively.


Conclusion

 

When you have tried the above-discussed ways to get out of your small business debts and failed, you may look for remaining alternatives such as selling off the business or liquidating the assets for negotiating a debt settlement with all your creditors. However, when all else fails, you could file for bankruptcy. Of course, it may have some drastic repercussions on your credit report.

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ঋণ

জর্জরিত ছিলাম এতদিন,


বোঝা হয়ে ছিল ঋণ,


বুড়ো নাবিকের ঘাড়ে এলবাট্রসের মত,


মনকে খাচ্ছিল কুড়ে কুড়ে গুবরে পোকার মত অবিরত।


 

এখন আমি ঝড়ের পরের নীরবতায় করি বসবাস,


এখন আমার নেই কোনও কণ্টকময় দীর্ঘশ্বাস,


এখন আমার প্রাণ খুলে হাসার দিন,


 শোধ হয়ে গেছে ছিল যত ঋণ।


 

মাথাব্যথা হল ঋণের আরেক নাম,

 

আল্লাহ্‌র রহমতে অবশেষে ঋণমুক্ত হলাম!

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