You’ve been looking into payday loans online and have taken out several, but what happens when one lender goes into administration? You don’t always think about lenders going bust because they have lots of customers, but in business anything can happen and already there have been several major lenders going into administration. However, what about when your lender goes into administration? What happens then?
You Must Continue With Your Loan Payments
First things first, when a company goes into administration, it doesn’t really change anything for you in terms of owing a loan. For example, you’ve taken out a loan and it’s due to be repaid within two weeks, you cannot turn around and say since the company is going bust, I get to take their money and keep it. It doesn’t work like that. You still have a responsibility to repay the loan. When searching for payday loans near me, you could find a company goes into administration, but again, the payments must be made to clear the debt. You cannot miss repayments otherwise additional charges may be added and it can impact credit further also.
No Additional Loans Will Be Offered
Any lender that has gone into administration will no longer be able to offer a loan. Why? They have issues with funds and they are essentially closing down. You may want to get a further loan but it’s no longer possible. The company will cease trading in terms of offering a loan, so while you still have to repay your current loan back. Even if you’ve got payday loans online and the online lender goes bust, you have the obligation to repay the loan. However, even if the company is looking for a buy-out from another business, there won’t be any loans available.
You Are Liable For the Loan
As said above, the loan must be paid back in full in order to clear the debt. A company might have gone into administration but that doesn’t mean you’re off the hook. The company or rather the administrators that have taken over the company’s business transactions will look at ways to recoup the money lost. If you owe money you must pay. If you default on the loan, the creditors can still look for a judgment against you and take action against you also. That’s why if you’re looking for payday loans near me and the company goes into administration, you remain liable for the debt until it’s fully repaid.
Contact a Financial Advisor
Lenders can go out of business all the time and when it happens to a lender you’re working with, you instantly think you’re off the hook for the balance of the loan. However, it doesn’t work like that. You cannot take someone’s money and not repay them, even when the company goes into administration. It doesn’t work like that and you are still liable for the loan outstanding. Even with payday loans online you have to repay them; if in doubt, talk to a financial advisor and they will let you know where you stand.