How can you avoid loan defaults?
Введение
The Agency for Regulation and Development of the Financial Market reminds that late payment of loan obligations may result in fines and penalties, a deterioration in your credit history, the transfer of relevant information to credit bureaus, and, in the case of prolonged delays, legal proceedings and forced collection.
At the same time, Kazakhstani legislation provides borrowers with effective tools for settling their debts before going to court.
What if the lender refuses?
Kazakhstan has a unified procedure for pre-trial settlement of overdue debt, aimed at protecting borrowers' rights and reducing the number of litigations.
If restructuring is denied, the borrower has the right to appeal to:
– the banking ombudsman for bank loans;
– the microfinance ombudsman for microfinance organization loans.
What are the possible consequences of outstanding debt?
If the borrower fails to act, the lender has the right to:
- transfer the debt to debt collectors (if less than 90 days overdue);
- file a lawsuit, after which collection is carried out by a private bailiff.
Enforcement proceedings may include the seizure of bank accounts and property, deductions from official income, and temporary restrictions on travel abroad.
The Agency urges citizens to responsibly assess their financial capabilities when applying for loans and promptly utilize legally provided support mechanisms if difficulties arise. Timely communication with the lender and constructive dialogue will help prevent the escalation of problem debt, legal proceedings, and forced collection.
More useful materials are available on the Fingramota.kz website.
What to do if a payment is late?
If a payment is missed, the lender is required to notify the borrower within 10 calendar days of the default, stating the amount owed, the possible consequences of non-repayment, and the right to request a change in the loan terms.
The borrower has the right to apply to the bank or microfinance organization for debt restructuring, stating the reasons for the financial difficulties and proposed options for changing the loan terms. The financial institution is required to review the application within 15 calendar days and may offer possible solutions.
Possible Restructuring Options
The lender may offer the following measures:
- payment deferral;
- extending the loan term to reduce the monthly debt burden;
- interest rate reduction;
- partial forgiveness of fines and penalties;
- independent sale of the collateral by the borrower.
Important: banks and microfinance organizations do not have the right to charge a fee for reviewing an application for debt restructuring.
How to prevent late payments?
To reduce the risk of debt, borrowers are advised to:
– plan their personal and family budgets in advance, taking into account mandatory payments;
– regularly monitor the loan repayment schedule and notifications from the lender;
– immediately contact the bank or microfinance organization at the first sign of financial difficulties.