What to do if you have a problem with your bank loan? 5 essential tips
Facing difficulty repaying a loan can quickly become a nightmare. Whether you've lost your job, gone through a divorce, or are simply struggling to make ends meet, there are solutions. Here are five steps you can take quickly to get out of this situation.
- Don't ignore the problem The worst thing you can do is let the situation drag on. The longer you wait, the more unpaid bills and penalties will accumulate. Contact your bank or credit union immediately to inform them of your temporary difficulties. They will likely be able to find an arrangement, such as a deferral of payments, until your situation improves.
- Take stock of your budgett Precisely list your income and all your essential expenses (rent, groceries, insurance, etc.). Cut back on the superfluous to create room for maneuver. You can present this budget to the bank to justify your good faith and renegotiate your loan: extending the term, adjusting the monthly payments, etc.
- Turn to social assistance Several systems exist to help you depending on your profile:
- The Housing Solidarity Fund for tenants in difficulty
- The Bank of France's over-indebtedness commission if you are in a financial hole
- The department's social services, the CAF or the CCAS can also guide and support you. Don't hesitate to contact them; it is their role to support you.
- Restructure your credits If you have several loans, a redemption of credits can be a solution to reduce your total monthly payments. The idea is to consolidate your various loans into a single new loan, over a longer period and therefore with a lower monthly repayment. However, be careful of the conditions (rate, insurance) which can increase the total cost of the loan.
- Consider an amicable sale As a last resort, if you are the owner, an amicable sale of your property can allow you to clear your debt and start afresh. It's a cumbersome procedure, but it's better than a seizure by the bank. The sale of the property should only be used to repay your mortgage, not your consumer credit.
A credit default shouldn't be taken lightly. If, despite these steps, you feel overwhelmed, don't hesitate to consult a specialized lawyer. They can assert your rights against your creditors and guide you toward the best solutions. Don't wait until your situation is hopeless; every problem has a solution when addressed early!