When hiring insurance or a consumer credit for some reason they may have to resign or cancel it, and that is when there is doubt about whether a consumer credit can be waived . We explain whether or not you can quit.
How to give up a consumer credit?
The Consumer Credit is a loan granted by a bank in the short or medium term and used to obtain freely available money and is usually used to finance the purchase of consumer goods or even for the payment of services.
About whether or not a consumer credit can be canceled , which is the query that many customer-debtors do, the answer is perhaps not what they want to hear. After they have signed the promissory note , the consumer credit agreement cannot be canceled to return to the original state.
Although there is an option for the debtor to pay the consumer credit in advance in order to cancel it, if he does so, he must pay and take into account the interest generated up to the date of prepayment and the prepaid commission. Canceling it for payment is not the same as canceling it. At the same time that the loan contract is signed, interest begins to be generated that cannot be canceled.
How to make advance payment of credit
An advance payment is when you pay money to advance the payment of unpaid installments of a loan and it is applied to the capital, thus decreasing the basis for calculating your interest. Each financial institution is different in terms of handling advance payments of its credits, so you should know your contract, which is where all the credit details are found.
It is important to note that in many cases, there are contract penalties for advance payments or early credit cancellations. If the financial institution charges any penalty or commission for prepayments, you should evaluate if it really suits you, since in some cases – especially when it comes to small advances – if the amount of the penalty is greater than what you will save on interest , it is not recommended that you do it.
Months of grace and months of non-payment, what are they?
Banks usually offer two modalities that allow the debtor to defer payment of fees and can coexist within the same credit if both parties agree to contract. The months of grace and non-payment are:
Months of grace
The client can initiate the payment of the first installment on the date after the first expiration, said term can vary between one and six installments counting the date that the loan was granted. Although, this implies a cost for the client because in the months in which he does not pay the fee, interest on capital is accumulated , which increases the initial debt and the value of the fee to be paid.
Months of no payment
In this case, the client may not pay one or more installments of the credit upon expiration, under the condition of meeting the conditions previously agreed with the entity that grants the consumer credit , although at the same time it generates that the interests of the unpaid fee, and is added to the capital owed. When requesting these modalities, the number of fees to be paid does not vary, when the value of the fee is estimated based on the requested term.
Closing the idea a bit. A consumer credit cannot be canceled. The only way to cancel it is with an advance payment of capital, which will involve the accumulated payment of accrued interest and, most likely, the payment of a penalty for breach of that part of the contract.