What happens if the borrower does not pay on time or stops paying?
In spite of all the attention paid when granting the loans and the preventive communication, some of the borrowers will not be able to pay because changes or accidents of life happen.
In case such difficulties occur, we’ll take care of the collection of the overdue. While respecting ethical rules, we’ll perform the following actions:
- Proactive communication through SMS, email and phone in order to contact the borrower and find with him an amicable solution.
- Possibility for the borrower to change the due date of the loan once per year. This would help in case the person has changed his job and gets paid on a different date, or in case the company has for example a change in the payment conditions by its clients.
- Restructuring the credit, mainly by decreasing the installment, ie by increasing the remaining duration.
- Postponement of an installment in delay to the end of the credit.
- Declaration of the delay to the Bulgarian National Bank Credit Bureau when the delay reaches more than 30 days. Such negative information compromises the future chances of the borrower to get a new credit anywhere in Bulgaria.
If none of these actions have a positive result, we will declare the loan defaulted and will sell it to an external debt collection agency.
A loan is considered defaulted if it has reached more than 5 installments in delay and if there is no payment in the last 3 months.
For personal loans, we have negotiated an agreement with a debt collection agency where each month we automatically sell, at a pre-agreed price of 20%, any personal loan entering in default.
For business loans, as soon as we have some significant volume, we’ll establish a similar agreement, at a price that might be different from the one for personal loans.
When such a defaulted loan is sold to this agency, all the pieces of the loan owned by the investors are repurchased at the same price and the investors receive the proceeds of this transaction in their wallet.
