What will happen if I do not pay one or more credit installments?

You have obtained a loan and have already acquired the desired good. From this moment begins a new stage of collaboration with a bank or non-bank lending organization – the process of repayment of the loan. As a rule, the first installment must be paid after one month, but depending on the loan term and the agreed conditions, the payment date may be different. It is important to know what amount you will need to pay and when, as well as what will happen if you do not pay one or more installments.

The fine and the penalty, applied in case you do not pay installments, can be: Fines and late fees may be:

fixed
calculated as a percentage of the overdue amount (example No. 1)
calculated on a progressive scale depending on the numbers of days in arrears (example No. 2)
calculated as a combination of fines and penalties (example No. 3)
in the form of increase in % rate
in the form of a demand for early repayment.

Examples of calculating the amount of the penalty in the case of the 30 day in arrears for a loan in the amount of MDL 10,000 with the term of 12 months and the monthly rate of MDL 888.89:

Example no. 1 – percentage of the overdu amount – 0.5% of the amount of the monthly installment for each day in arrears

0.5% x 888.89 x 30 = 133.33 (MDL)

Example no. 2 – progressively based on the number of days in arrears – up to 10 days in arrears – MDL 100, between 10 and 20 days – MDL 200, between 20 and 30 days – MDL 800

100 + 200 + 800 = 1100 (MDL)

Example no. 3 – combination of penalty and fine – 0.5% of the amount of the monthly rate for each day in arrears plus the single fine of MDL 200 for every 10 days in arrears

0.5% x 888.89 x 30 + 200 + 200 + 200 = 733.33 (MDL)

The amount of fines and penalties can sometimes exceed the amount of the loan, and the methods of collection differ from one lending institution to another.

What will happen if you do not pay the loan rate?

From 1 to 15 days – the bank or non-bank lending organization will contact you (by phone) to remind you about the need to pay the rate. Keep in mind that you can receive only one phone call and the penalty will be calculated from the first day in arrears. The average size of the penalty constitutes 0.5% of the amount of the monthly rate, but several organizations set a minimum amount, from MDL 10 to MDL 20 per day.

From 15 to 30 days – the bank or non-bank lending organization will send you an official letter asking you to pay the debt. The penalty in the amount of 0.5% of the monthly installment amount will be calculated further, moreover, it is possible to apply single fines in an average amount of MDL 200 for more than 10 days in arrears, after which for 20 and 30 days .

From 30 to 90 days – at this stage some non-bank lending organizations send debtors to third-party institutions, which may apply different rules for debt recovery, as well as change the amounts of fines and penalties. You can also be visited by the collector from credit company or bank. In the case of more than 45 days in arrears, some companies apply a fine equal to 30% of the credit balance. The penalty of 0.5% of the amount of the monthly rate will be calculated further.

More than 90 days – at this stage the case is usually sent to the court.

Strive to repay the loan on time. Even a small delay in repayment or payment of an incomplete amount will affect your credit history and next time your credit applications may be denied by banks and non-bank lending organizations.

If you know that you will not be able to pay the installment in time, contact your loan officer and inform him. Specify the options for resolving the situation.

If you have not paid several installments, but the case has not been sent to the court, you can request a credit restructuring – a review of the credit conditions, which will allow you to:

– reduce the interest rate

– extend the repayment period of the debt

– have a deferral (credit vacation)

– suspend the calculation of penalties and fines

In order to obtain the credit restructuring, prepare a letter explaining the reasons why debt repayment is not possible at the moment and request a restructuring or other convenient debt repayment option.

It is important to keep in touch with the bank or non-bank lending organization because you do not solve the situation if you refuse to accept calls and messages from lending institutions. Keep in mind that when submitting the case to the court, probably you will have to pay the appropriate costs, and the amount you will eventually pay will be bigger.

Remember that the solution can be found at any stage. Responsible banks and companies are interested in maintaining partnership relationships with the client and will offer you ways to solve the problems that have arisen.

Be informed when choosing your financial partner.

GMW March 25 – 31, 2019

www.globalmoneyweek.org

Learn.Save.Earn.

Client's Name
Client's Surname
Personal Identity Number
Currency
Term
Rate
Amount
Monthly payment
Amount to receive
Purpose
Comments

1. Name and Contact Information of the Creditor
Creditor
Address
Phone number
Email Address
Web page

3. Costs of the credit
Rates related to the credit
Annual Percentage Rate of Charge (APR) This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers	%
In order to obtain the loan in accordance with the agreed terms and conditions, it is mandatory to conclude an insurance contract to guarantee the loan or a contract for another ancillary service.
Related costs
Any other costs deriving from the credit agreement	Fee for services rendered in relation to usage of credit, calculated and paid as follows: of the credit and paid by the Debtor on the date of granting the credit from own sources or is deducted by the Creditor from the amount of the credit The negotiation / prolongation of the credit can take place by mutual agreement of the parties, by signing an additional agreement, the Creditor being entitled to request an increase in the interest rate within the limits provided by the legislation in force. In case of negotiation / prolongation of the loan, the Borrower shall pay to the Creditor, at the date of the negotiation / prolongation a commission in the amount of 2% from the credit balance at the time of negotiation / prolongation.
Conditions under which the costs related to the credit agreement can be changed	The Sides can change the costs related to the credit by written agreement signed by both parties; For the non-constitution of the guarantees within the agreed term, the Creditor is entitled to calculate, and the Client will pay to the Creditor an Interest of delay in the amount of 5% annually, applied to of the daily balance for each day of delay, starting with the date following the term established for the constitution of the guarantee/ s and until the date of the proper execution of the respective obligation.
Obligation to pay for notarial fees / mortgage registration fees / fees for noting the prohibition of pledge in the Transport Register related to the pledge of means of transport (agricultural machinery)	Paid by the Client , except as otherwise provided in the pledge / mortgage agreement.
The cost for the valuation of real estate proposed in pledge	Paid by the Client directly to the Evaluator
Costs in the case of late payments Missing payments could have severe consequences for you (e.g. forced sale) and make obtaining credit more difficult
The repayment of the loan is free of charge in the secondary offices of the Creditor, as well as at the discretion of the Debtor through the representatives authorized to collect loan payments. The list of which and their fees are published on the website of the Creditor (www.microinvest.md/cum-achiti-creditul/). In case the Debtor use payment methods with fee, the Debtor cover all the costs of repayment of the loan and undertake to make the payments in such a way that the Creditor receives the agreed repayment amount and without any deductions by third parties processing the refund payment.
In accordance with and arising from the provisions of art. 15, para. 7), lit. a) from Law no. 202/2013, any payments related to the granted credit (commissions, taxes, penalties, late interest and any other type of payment), except interest, will be applied and collected within the limit of the ceiling of 0.04% of the total value of the credit per credit day multiplied by the number of days of actual use of the credit (hereinafter 'Ceiling'). Therefore, the Lender will be entitled to apply and collect the costs, excluding interest, exactly in the fixed or percentage amount established in the contract if the said ceiling allows, and if the ceiling is lower than the value of at least one cost, excluding interest, then the Lender will be entitled to reduce the fixed/percentage amount and apply and collect any of the applicable costs only within the limit of the ceiling value. When calculating the ceiling, the costs already applied and collected will be taken into account, with the exception of interest, which reduces its value. (Representative example: if the amount of the penalty is 20 MDL per day, and the ceiling value at that time is 16 MDL, then a maximum of 16 MDL will be collected).

4. Other important legal aspects
Right of withdrawal You have the right to withdraw from the credit agreement within a period of 14 calendar days	Yes
Early repayment You have the right to repay the credit early at any time in full or partially	Yes
The creditor is entitled to compensation in the case of early repayment The Debtor may repay the loan in full or in part in advance, notifying the Creditor in writing 3 days in advance, and paying an early repayment fee of:	% from early repaid amount, if the period of time between the date of early repayment and convened maturity exceeds one year; % from early repaid amount.The early repayment can be made only if the Debtor has no outstanding debts on interest or other amounts to be paid in accordance with the Contract. % from early repaid amount, if the period of time between the date of early repayment and convened maturity does not exceed one year.
Database usage The creditor must inform you immediately and without charge of the result of a consultation of a database, if a credit application is rejected on the basis of such a consultation. This does not apply if the provision of such information is prohibited by law or is contrary to objectives of public policy or public security The parties may agree on additional terms and conditions, which will be included in the credit agreement.	Yes
Right to a draft credit agreement You have the right, upon request, to obtain a copy of the draft credit agreement free of charge. This provision does not apply if the creditor, at the time of the request, is unwilling to proceed to the conclusion of the credit agreement with you	Yes
The period of time during which the creditor is bound by the pre-contractual obligations	This offer is valid for 15 calendar days after it is issued.
In this regard, I subsequently declare that: I was provided with the necessary information, the essential characteristics of the above-mentioned credit product were explained (interest rate, number of commissions, credit costs, early repayment conditions, total amount to be paid), as well as the consequences of non-compliance with contractual clauses; the costs included in the total cost of the loan were explained to me, including the costs for ancillary services related to the credit agreement; I was offered the possibility to negotiate individually the contractual clauses in the credit agreement that I intend to sign, I negotiated individually the granting commission, the monthly commission, the amount of penalties and I mention that its clauses do not disadvantage me, being fair in the report mine with the creditor; I was asked by the creditor about the probable importance of the information provided and whether essential circumstances that I expected to be provided were not omitted in order to make an informed and rational decision about concluding the potential credit agreement. the information provided and the corresponding explanations allowed me to assess, including the personal analysis of other offers of third party creditors, whether the proposed credit agreement is tailored to my needs and financial situation; I know the content of the contract and all its conditions have been explained to me, I have understood and accepted them, and the documents and information underlying the conclusion of the contract are complete and accurate; I know the law, the normative acts that will govern the contract, as well as the lack of consumer quality; I have no ambiguities or misunderstandings regarding the terms of the contract; the credit product corresponds to the purpose described above and will be used according to the destination and the economic activity carried out. The assets procured/resulted/constructed/repaired from received loan sources will be registered/transmitted in the social capital of the company where my business activity is carried out and/or will be used jointly by the members or individually however strictly for running my business activity. (Signature)