Not Paying Your Loans On Time Can Ruin Your Life

Not Paying Your Loans On Time Can Ruin Your Life

Although wanting to get a personal loan may seems to be a great idea. More so when you would like to purchase the latest smartphone. Or even when you are thinking of going on vacation. You could be thinking that you will pay it back. Maybe in several months and things will work out well.

Generally, it is natural that each one would like to live better. With the many kinds of loan products available. Most Singaporeans are now able to improve their lifestyle. Yet it could also get others in some big trouble.

Making use of a loan will not imply that you just have got a gift from your money lender. Actually, this is a responsibility you have to fulfill otherwise it might affect your life.

Collection Process

When you fail to pay back your existing debt:

Unsecured loan

When you fail to repay an unsecured personal loan. Your money lender may be required to write off the debt. Even so, lots of real consequences can come from this.

Secured loan

When you have taken out a personal loan that is secured. The security you put in will be determined by your money lender. It might seem like the worst situation. However, this is logical to think this. In case you are not able to meet the loan obligations.

When you have taken out a loan with a moneylender. The debt has possibly increased a few times over. This is owing to the late penalties and high interests charged. The licensed moneylender may even get a debt collector who will chase after you.

All types of loans: These will negatively affect the credit rating.

Consequences Of Not Repaying Your Loan

Not settling your outstanding loans can actually affect your life. This is regardless of whether this is several thousand dollars from a moneylender. Or even a bad decision of investing millions of dollars. Below are a number of possible negative effects of not repaying your loans.

Limit to Accessing Credit

By holding a bad credit score could limit access to any credit. This is even for several years in future. Even when you hold a stable salary. You may be unable to access a mortgage thus it will force you to rent.

This will even prevent you from growing some equity in the property. Singaporeans who are not able to access educational loans might struggle. This can affect their ability to land better job opportunities. This could also mean getting promotions as well.

Difficulties In Getting Hired

Borrowers need to remember that all defaults will be included on your credit record. It is also possible that potential employers will ask for your credit record. This is even before they can hire you. When you have failed to make payments on the loans. Yet you have not tried to even repay them.

This default can remain on your report indefinitely. Several companies could consider this to be some sign of having irresponsible behavior. This will make it also just about impossible for you to get a work. This is especially in industries like in finance when you hold a bad credit report.

Accounts Getting Blocked

When you have some savings in your account yet you have not settled your existing loans. These funds could be seized. When the money lender think that you have some money. Yet you just refuse to settle your personal loan monthly payments. It is probable that they could initiate some legal proceedings.

Following the loan agreement that you had signed for credit card or loan. By law, you are obligated to repay your debts. When you actually have some savings. Then, it could be a wise idea to use these funds to pay off your existing debt. It is not worth it to damage your credit status simply by not repaying your loan.

Phone Harassment

When you are several days late in making the monthly loan payment. You will likely start getting calls from the lender. However, based on whether the money you owe is from a banking institution or a moneylender. It could also be from a loan shark, then there will be a difference in the calls. That is from polite to outright threats.

What you should do: when you know that you will not be able to make your payment on time. Make sure that you contact the lender to ask on whether it can be delayed. When you, however, have frequent difficulties in making repayments.

The lender will offer to even restructure your current loan. Therefore be cooperative with your moneylender. By not ignoring phone calls from them. When you try to hide can only worsen the situation.

When you are over 30 days late yet you have not made attempts to repay your personal loan. The lender could take much severe legal action against you.


When your loan exceeds $10 000 yet you are cannot settle it. You stand to face bankruptcy. When you submit a bankruptcy application to the law court. But your credit totals below S$100, 000, the law court will refer the lender to the IPTO (Insolvency and Public Trustee’s Office ). This is aimed to assess the borrower’s eligibility to get into a Debt Repayment plan (DRS).

In case of bankruptcy, the Official Assignee (OA) can scrutinize your existing assets. Then sell all the possible assets to pay off your debtors. It is also could be required that you chip in a part of whatever income you currently are getting.

Even then bankruptcy has more serious effects. You cannot:

– challenge any organization in court. This is without an approval of the OA

– go out of the country with no permission from the OA

– continue holding a public office or even be a director of an organization

Bankruptcy also will be included on your credit report. This can make it rather hard for you access any credit cards, loans, or mortgages in future. Being bankrupt will affect your way of life dramatically. It will also affect your relations with friends, family, as well as employers. Hence, it is highly advisable that you avoid going bankrupt.

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