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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
Opinions expressed by Entrepreneur contributors are their own.
- Negative impact on your credit history.
- Collection calls and emails.
- Physical visits.
- Judicial collection.
Nowadays it is very easy to request a loan online . You can do it from the comfort of your home or office, from your mobile phone or on your computer, at any time and at any time. In addition, the vast majority of fintech companies do not ask for guarantees or guarantees to obtain credit. In such a way that, if you are approved, you will receive a wool in your bank account in the form of a credit, and many times in just minutes.
The speed and simplicity of the process and the physical remoteness of the institution that grants you the credit can simulate that the consequences of not paying are few or zero. In the end, is the Internet portal going to charge me up here in my town? It is very common for the debtor to see the digital process and not hint that behind that Web page there is a team of people –including professional collection teams– dedicated to recovering all the credits dispersed by the platform or fintech.
Some other clients, trying to substantiate their non-payment, may think that since they did not sign anything, there is no obligation to pay. But absolutely all platforms require the signing of a contract or digital acceptance, which in Mexico has the same validity as the autograph signature. So hiding behind this concept is wrong.
Prestadero is one of the first platforms (if not the first) to grant credit online in Mexico. Over the years we have come across many misperceptions from debtors about their obligation to repay the credit. Not all, but some, minimize the consequences of not making their credit payments online, and are surprised when they notice the serious consequences first hand.
So it is important that if you are considering requesting a credit online you know very well the consequences of not paying:
Negative impact on your credit history
The companies that grant credit over the Internet, as well as any financial or bank, report your payment behavior to Credit Information Companies (such as Credit Bureau). So, if you stop paying, those arrears will be reported (including the amount and days of arrears) and will be reflected in your credit history. Even when you pay later and get up to date, there is evidence that you fell behind in said credit, the amount of the delay, and the days of said delay. How does it affect you? When you reapply for a loan with another institution, they will see such arrears and almost certainly they will deny you the credit, or they will offer it to you with very unfavorable conditions (such as high rates, mandatory guarantees, among others).
Collection calls and emails
Companies ask you for contact information (and sometimes we ask for references). These data are used to locate and contact you in case of non-payment. It is very annoying to receive collection calls on your phone, home and office; or that you receive messages from your references asking you to contact the financial company to settle your debt, but if you stop paying, this is one of the consequences.
Most people who apply for credit online believe that they will just have to avoid annoying collection calls. But companies have staff, either their own or through a third party, to carry out home visits throughout the country. Many people are surprised to note that there are people who do visit your home or job to demand payment, which can be painful for the debtor. In general, if there is efficient communication and willingness to pay, companies avoid sending debt collectors to their homes, but in extreme cases, such visits are made to the debtor.
This point is very important, since debtors are often unaware of this important consequence. When negative reports to your credit history, calls and emails, and home visits do not work for you to catch up, online credit platforms choose to file a lawsuit to require payment. Of course, this process also comes at a cost to the grantors, which is why it is considered the last option once all other attempts fail.
Judicial collection basically consists of obtaining a judgment to collect the credit with the applicant’s assets. The fact that a loan is born without guarantees does not mean that these later cannot be presented under a judicial collection. Following a court ruling, the grantors can request to charge you with real estate (such as houses), cars, household goods, bank accounts, investment accounts, or even part of your salary.
We grantors know that sometimes situations happen outside the reach of credit applicants. An applicant can stop paying due to lack of employment, health problems, or even natural disasters. But if the perception of whoever gave you the credit is that there is simply a refusal to pay and there is no will to give a good conclusion to the credit contract, a lawsuit will be filed to recover the credit.
In summary, the consequences of defaulting on a loan are very similar to traditional credit granted in physical form. But if you make your payments on time, rest assured that online credit will open the doors for you so that each time you can have access to cheaper credit and much more conveniently than going to branches. It is up to you that you can take advantage of technology correctly to access the new financial services that are coming.