In the financial industry, there is the so-called creditor and debtor relationship. If you are a creditor you might issue rules and regulations before you approve a loan. At the same time, the debtor is also aware that they have responsibilities to abide by the rules of the payment.
Debtor Vs Creditor
A debtor is a person who owes money from another party while a creditor is the one who lends money, goods, or services to others. In some way, creditor and debtor are relatively connected to each other. Creditors may lend money or extend credit to their debtors.
- Extending credit – refers to extending a small amount of money to the debtor.
- Lending money – refers to extending money with a collateral demand because of the large amount of money that the debtor requests.
In lending, aside from collaterals creditors do have inkasso regler (debt collection rules). This serves as their assurance if the debtor fails to pay his debt. For debtors, they are advised to be familiar with the inkasso regler (debt collection rules) to avoid any possible case in the future if they failed to pay.
What will you do if you fail to make your loan payment?
There are times that debtors failed to make their loan payments. Sometimes it is unavoidable. It might result in a case if you will not settle it properly. So, what step should we take? The first step is to contact your creditor immediately. If you can’t make it on a due date, better to let your creditor know so you can have alternatives.
As much as possible don’t wait for the call from your creditor to remind you of your due. It will be a disadvantage on your side. If you ever have missed your due date, try to negotiate for a grace period. Most lending companies do have such programs.
There are also instances that we really have suffered from an unexpected change and make it hard for us to regulate our loan or debt. If such happen, better to ask your creditor for alternative loan terms. Some creditors offer to extend your loan terms payment without adding the interest.
Your Loan Obligations
If you are a debtor, sure you know that you have obligations. Before you are issued with a loan you are entitled to sign loan agreement documents, right? As much as possible, we should act accordingly to what we have signed. Neglecting it might bring us to trial especially if our loan is a huge amount.
Be a responsible debtor. Pay according to the agreed date as much as possible. If you fail to do so because of uncertain events, negotiate as early as possible with your creditor and know the alternatives. They can let you restructure your loan if you are in communication with them.
Note that it was you who need their service or aid. If they see that you are a responsible debtor they will not be hesitant to let you borrow the next time you need it.