Mastering Your Payment Schedule: Avoiding Late Fees
Before borrowers are approved for a loan, they will be informed about the lender’s expectations for repayment. If the terms are agreeable, borrowers proceed by taking the loan and signing the contract. Among these terms, borrowers will be notified of their monthly payment due dates. By signing the contract, they commit to making these payments on or before the specified due dates.
However, if a borrower makes a payment even just a day past the due date, it qualifies as a late payment. This delay could incur additional fees, thereby increasing the overall cost of the loan. To prevent late payments, borrowers have the option to request automatic payments through their banks. This ensures that their accounts are debited on or before the due date, effectively removing the need to manually issue and send checks and minimizing the risk of late payments.
Taking proactive measures like establishing automatic payments can safeguard borrowers from unnecessary penalties, preserving their financial health and potentially enhancing their credit score.
Related Terms: loan agreement, payment due date, financial planning, debt management
