No requirements, endorsements, or paperwork are necessary and in some cases you can apply for the loan even if you are included in an ASNEF delinquent list.
There are many advantages of this type of urgent loans, especially if you face unforeseen and unavoidable expenses. However, most of these mini-loans or microcredits usually have a short repayment term, with a maximum of 30 days to repay the amount borrowed plus all interest. It is clear that before requesting a loan or credit you should always consider both your economic situation and all the conditions of the chosen loan. You should carefully evaluate them to be absolutely sure that you can return the loan at the established time.
If, despite being a responsible person, your loan expiration date is approaching and you, for whatever reason, do not have the money to pay it off, what options do you have?
Do not return the urgent loan amount
Debt default is undoubtedly the worst possibility you can choose to solve the problem. Since the non-payment of the debt does not cancel your payment obligation. That is, the opposite effect takes place – if you do not repay the loan amount plus all the corresponding interest, the amount of the debt will be progressively increased. Thus, every day that passes without fulfilling your payment obligation, the money borrowed will be more expensive.
Request a fast loan extension
An extension means an extension of the return period. Some financial institutions offer these deferrals as an additional advantage. An extra time to rebalance your economic situation and return your mini-loan without falling into default. However, not all lending entities for urgent mini-loans include this option. If they include it, the terms and costs offered to you are different from each other depending on the conditions of each particular lender.
In order to grant you the extension, some lenders ask to reimburse the interest generated so far and return the amount at the end of the extended term. Enjoying an extension has a cost that varies depending on the amount of the loan requested. In any case, the amount of the extension will be less than what you would have to face if you incur in default.
And if you can’t pay the extension?
The extension conditions usually vary depending on the entity you go to. In case you are not able to pay for the extension, the application will be canceled. Therefore the maturity of your loan will be that of the original term.
If you cannot disburse the amount of the extension nor do you face your obligation to pay for the urgent mini-loan, then you will have to pay the late payment interest for the breach of your obligations and the non-payment of the loan amount that you requested with your respective interests.
The option of deferment of payment or extension is usually used to avoid defaults since extending the term will always be cheaper than not paying. However, extensions also have an additional cost that you must pay. It is always better to comply with the contracted conditions and return the loan at the established time, avoiding both default and deferrals. You should not request mini loans and fast mini loans if you are not completely sure that you can repay them within the original agreed term.