When a borrower defaults on a loan, meaning they miss repayments or interest payments, the lender must either renegotiate the terms and conditions of the loan agreement to make it possible for the borrower to repay the loan, or they must take steps to collect the debt. For example, they may be able to spread amortization payments across a longer loan term so that individual repayments are smaller. If a borrower is not able to service their loan – meaning they are unable to meet their amortization and interest payments on time in keeping with the loan agreement – they will have to make an effort to negotiate new terms and conditions with the lender. Borrowers must make sure that interest payments are met. In the case of a revolving loan, the lender must make sure that the borrower makes their interest payments. For their part, the borrower must make sure that they meet their amortization and interest payments until they have paid off the loan. In every case, some entity must ensure that the borrower repays the loan in keeping with the terms of the loan agreement and that repayments and interest are transferred to lenders.
A loan may be transferred from the original lender to third parties over its lifespan, and these third parties will collect loan repayments and interest. The life of a loan begins when a borrower is first given a loan by a lender and it ends when the loan has been fully amortized and interest has been paid in full.
Moneyhouse loan servicing full#
In finance, the term loan servicing refers to all actions involved in the administration and amortization of a loan and all related costs across the full loan term.
0 kommentar(er)
