Taking on a loan of any kind requires a fair amount of responsibility and commitment. For a first time loan taker, this may not come easily, especially with all the other pressures of life like rents to pay, school fees and of course birthdays and anniversaries to remember! A responsible lender will always ensure that borrowers are assisted in the repayment process. This ensures they aren’t hit with unnecessary late payment and default charges from banks and lenders and more importantly, can grow your credit score each month!
The first step to avoid default is to not bite off more than you can chew. When discussing a potential loan with a client, a responsible lender will always spend time understanding the customer’s income and monthly expenses even before proposing a loan. Only after a thorough analysis, is the loan structured in such a manner that the monthly repayment amount should not put a burden on you, after paying all expenses and saving some of your income for a rainy day.
You may not always have the details of a loan you signed up for at your fingertips. This is where responsible lenders ensure that at the time of signing, you’re given a printed or e-document of all your loan details including loan amount, interest rate, monthly installment amount payable and the due date each month. This ready-reckoner is a useful tool to remember what you have to pay and when each month.
A really good practice that some lenders follow, is also to provide an easy-to remember EMI reminder card to insert in your wallet or paste on your fridge to ensure you don’t slip up unknowingly!
ECS/ Direct debit
One of the most effective methods of making timely payments is to automate your payments through a direct debit or ECS (Electronic Clearance System) facility that your lender provides. By signing up for this, from the Day 1 of your loan, you can authorize your lender to debit your account to the amount of your monthly repayment by a given date, so that you needn’t keep track of dates and can carry on with your life hassle free!
Multiple repayment options
If you do not choose to sign up for a ECS or direct debit, your lender can today help you make payments by offering a multitude of easy-to-access payment methods such as payments online through netbanking, mobile payments, account to account transfer like NEFT and RTGS as well as traditional methods such as payments at bank counters, post offices, points of sale and payment centres.
Reminders – calls, sms, emails
Who doesn’t like a friendly reminder to ensure you don’t forget something important? Responsible lenders help their borrowers, especially first timers, to remember their due dates with reminders through brief calls, emails or messages. Generally scheduled a few days before the due date, these reminders help first time borrowers make their monthly payments well in time, to ensure no default charges are levied on them on account of bank processing days. Offering this service has been welcomed by many customers and is a great assistance to those who may be too busy in their work and family lives to recall payments on time.