When do you actually need Financial Delinquency Services

Loans and credits of any kind comes as a boon for an individual during financial emergencies. There are various types of loans available such as home loans, education loads, business loans, personal and vehicle loans, etc. One can borrows these loans against the security of gold or property owns by the individual. While also exists short term loans that a person take for managing their expenses that are paid after receiving salary.

While getting a loan can be easier, repaying the loan can be excruciatingly daunting. Usually, loans are repaid through equated monthly installments (EMI). Each EMI includes a part of interest, principal amount varying on the interest charged by banks. When you apply for a loan, your bank will specify you a date on which your EMI will fall.

While it’s extremely recommended to pay the EMI within the stipulated timeline, some people miss it due to an emergency or oversight. Paying EMIs is very important as it affects your credit worthiness. It is essential to maintain a good credit score if you are looking for a loan in the future. Coming back to the topic, when you miss payment, it can affect your chances to get a loan in the future. How it affects your credit score depends upon how late you are of paying the EMI.

What is Delinquency in financial terms?

Let’s understand this with an example. Let’s say Faisal has taken a car loan from a bank and applied for a car loan. However, his loan was turned down by the bank stating that he had a delinquent account.

Any account that missed payment past the due date is considered as a delinquent account. Meaning, even if Faisal delay the repayment for one day, then his account will be reported as delinquent.

Lenders often give you a few days margin to repay the amount instead marking your account as delinquent immediately. Sometimes, they may remind you of the missing payments through phone call or send you an email. In most cases, lenders marks an account as delinquent if you miss the payment for 2 days.

An individual may be considered as delinquent if he/she missed the payments of a single account for more than 2 times consecutively or miss payment in a single month through various credit accounts.

What happens if your account is delinquent?

Each credit action can have a negative or positive affect on your credit score. If you have a single delinquent account then your credit score will fall a bit. However, if you have multiple delinquent accounts, then you may see a big drop up around 100 points on your credit score. In both cases, you have to pay a late payment fee or a penalty interest.

How Financial Delinquency Services helps with delinquency?

In this fast-paced lifestyle, it’s quite common for an individual to lose track of their payments. This is one of most common cause of missing payments. Financial Delinquency Services are customer centric organizations that helps customers with services like:

Rescheduling of loans and claims

If you have missed a payment for uncertain conditions then you can contact a financial delinquency service provider to reschedule your loan. Financial delinquency service provides can help you reschedule your loans by extending timeline to your existing loan tenure. They can also help you revise your monthly instalment allowing you to pay lesser amount each month.

Negotiating bank settlements

In case you are unable to pay your balance, then a delinquency service provider can negotiate to your creditors on your behalf to reach a settlement agreement.

Debt transfer

With debt transfer you can carry your outstanding debt from one creditor to other. Service providers can help you find the right creditors providing lower promotional interest rates and better financial advantages.

Debt management

Financial delinquency services help you build a robust debt management plan (DBM). DBM is an agreement between a debtor and a creditor about the terms of an outstanding debt. Through Debt settlement and conflict mediation plans, delinquency service providers’ help in reducing your outstanding and unsecured debts and allows you to regain your control over your finances.

Financial Delinquency Services acts as a bride between lenders and customers by helping them manage, monitor and control delinquent loan accounts by providing an automated loan collection management framework.