SoftSettle Support
Loan collection is usually a process which is highly regulated. As the creditor wants to get back the loan with its interest, they usually offer the loan with either a mortgage or a guarantor to back the debtor. The debtor enters into a legal agreement with the lender to repay the loan by a particular time and date.
This is monitored by both the creditor and the rating agencies to track how prompt a debtor is in repaying the loan. This is used to calculate the credit score of a debtor for future loans.
Generally, the method to collect a loan follows the steps given below:
• Collect the money coinciding with the arrival of the debtor’s income cycle
• Maintain a systematic follow-up on how the customer can handle the repayment
• If the customer shows discrepancies in one or two installments, reach out to the customer to find out the cause.
• If the customer is prompt, preserve goodwill and promote more offers to him.
When it comes to collecting back the loan, banks adopt usually two methods of collection. As loans are paid back in EMIs, the banks do not intervene or disturb a customer if the payment is prompt and on time. They maintain a cordial relation with the debtor and accord them with further credit proposals if the client exhibits discipline in the repayment process.
However, not all debtors can pay back on time. Owing to various reasons, they may default on the payment of their owed capital. Such defaulters are usually provided with several opportunities to pay back their owed sum.
Following methods are usually undertaken to ensure that the debtor is legally requested to fulfill his commitment:
• The bank will send a ‘letter of demand’ to the debtor on its letterhead, demanding that the debt is to be paid within a particular date or legal action may be taken.
• Secondly, they may issue a ‘final’ letter of demand
• Several banks also contact their clients via phone to get them on record to find out the reason for their potential defaulting.
Let a new device helps both creditors and debtors
SS-Equity, a virtual neutral comes to help both creditors and debtors to come in terms rather than fighting with each other or leading their relationship in bickering.
Rather the defaulters would be approached at their time of default and they would be alerted regularly so that they can participate in the resolutions offered by the platform SOFT SETTLE as early, middle and final level intervention. Even the alert would also provided information about their Credit Ratings updates (CIBIL in India).
Even before going for the resolutions in each level of interventions, the debtor would not be denied an opportunity for interacting with the creditor virtually and that itself would pave way for any easy resolution probably results in both parties winning without any hurdles.
An automatic agreement gets generated duly executed, which has legal validity and enforceable in the eyes of law.
This method could leave the parties taking the control of the financial problems and settling the financial issues in a faster, efficient and cost-effective manner.