Pay Your Debt on Time

Debt can be expensive. There is interest to pay and fees for maintaining and obtain your credit. This is if you obey the loan terms that you agreed to - but if you don't pay your debt payments on time, it can get even more expensive for you.

There are several expenses in not paying on time you should deal with if you are in a situation where you can't pay your loans on time. Some are obvious, while others are more indirect.

The late fees

If you miss a payment, the people you owe money are not going to be happy. They will most likely charge you a fee for paying late and they are right in doing so, even though it might seem unfair that you have to pay more now, when you don't have the money to pay the bill in the first place! But your not paying is a breach of your agreement and they have extra expenses dealing with your late repayment. They would also like to discourage you and other people from paying late again.

Registration as a bad debtor

By paying late you risk getting registered as a bad debtor. Obviously, this will not happen if you are just a few days late and it is the first time you are paying late. However, it might happen if you continue to make your payments late. It will very likely also hurt your credit score if you don't pay on time. This is again the lenders' way to protect their business.

No future loans

If you get to the point where you have been registered as a bad debtor or your credit score gets affected, you will find it difficult to obtain new loans. If you can find new loans you will probably have to pay a huge interest rate. Not getting new loans could be a good thing, as you should not get into more debt if you already have problems paying the debt you have. However it might result in you not being able to buy a house with a mortgage several years into the future.

Loss of self worth

This might be the biggest loss of them all. If you start feeling bad about yourself, because of money issues, this is not good. You have gone too far and it is time to do something serious about it, as it can affect the rest of your life. Try to keep things in perspective, though. There are a difference between not paying off your debt due to unfortunate events and not paying because you acted recklessly when you got into debt.

Of course, you don't always have a choice. Sometimes you are just struck by unfortunate events that knock your finances off balance. The best thing to do in that case is to realize it has some cost for you and then deal with the problems head-on.