What happens if a borrower delays payments or does not pay at all?
In case of overdue payments we remind borrowers frequently and get in touch with them. Late payments affect the borrower's rating negatively which means that borrowing terms deteriorate. While having outstanding overdue payments a borrower cannot get any new loans.
If a loan is overdue for more than 30 days we have the right to cancel it. This means that we can send all overdue and future payments to a debt collection agency. Furthermore, all payments will become due at once
Should a payment be late for more than 90 days the loan is in default. The claims on all outstanding payments will be passed to a debt collection agency. This has a number of negative economic and legal implications on the borrower. Especially the ability to close new contracts like a mobile phone plan or a car lease become impossible as a result of collection. Amounts that are collected from the borrower will be paid to the lenders after deduction of collection costs.
Once we at Bitbond have taken all collection actions that are within our means, a defaulted loan gets charged off. In that case we reveal the identity of the borrower to each lender of the loan. We also confirm your open claim as a lender. This allows you to take legal action on your own behalf.