What will happen if you do not pay the microloan

Many Ukrainians choose online lending from microfinance organizations (MFIs), because getting a credit card even without interest is simple and fast. However, some customers may face difficulties in paying their obligations. In this article, we will consider the consequences of non-payment on a loan and recommendations on how to act correctly to reduce losses and avoid additional problems.

What is a microloan?

Online microloan is a form of lending available via the Internet without the need for a personal visit to the lender. To apply for such a loan, it is enough to submit an application through the web platform and conclude an electronic contract. To get this type of loan, you only need a passport, an identification code and an electronic signature. This type of loan can be obtained by almost all citizens, even those who do not have a perfect credit history.

Should lenders provide you with information about the potential consequences of using a microloan?

According to the requirements of the National Bank of Ukraine, banks and non-bank financial institutions must publish the terms of microloans on their websites and in advertisements, as well as inform potential customers about the possible consequences of using the loan. These requirements are regulated by the resolutions of the National Bank of Ukraine, in particular Resolution No. 100 of October 5, 2021 "On approval of the Regulation on information provision by financial institutions for consumers regarding the provision of consumer lending services" and Resolution No. 130 of October 18, 2023 "On debt collection under a credit agreement".< /p>

Rules and duties of collectors: what they can do and what is prohibited by law.

Regarding the rights of collectors, they can demand payment of the debt, interest, fines and penalties, and contact the debtor by phone, email, SMS, letters or in person. They have the right to provide information about the amount and state of the debt, the consequences of late payments, the possibility of debt restructuring or write-off, as well as offer to conclude a debt settlement agreement.

Regarding prohibited actions, debt collectors may not use insults, threats or blackmail against debtors, as well as disclose personal data without their consent or a court order. It is forbidden to contact relatives, friends or employers of the debtor without his consent, to make automatic calls for more than 30 minutes a day and to hide your contact details.

What will happen if you don't pay the microloan?

Late payment of online loans entails civil and not criminal liability.

If there is an overdue debt, the MFI can:

• Apply to the court with a claim to recover funds and interest from the debtor.
• Open enforcement proceedings and seize your accounts.

However, if there are valid reasons (family circumstances, illness, military service, etc.), you can write off all interest and pay only the loan amount. In order to correctly resolve such issues, it is recommended to order legal support to receive professional advice regarding your legal status and your options in case of overdue debt.

Receiving legal assistance in resolving issues with microloans

Involvement of a legal specialist in solving issues with microloans includes obtaining professional legal advice on the rights and obligations of the borrower, identifying possible legal risks in case of non-fulfillment of the terms of the credit agreement, as well as analysis of possible ways of protection against illegal actions of creditors or collection agencies. For additional information on ordering legal support, the price of consultations and the cost of legal assistance, you can find out by calling the indicated phone number.