In the repayment loan, the borrowers decide on a possible form of financing real estate, whereby the term of the loan is also the term of the borrower who has to pay a lot of interest. Correctly repay repayment loan by bank transfer. The blog builds on the term “commercial aspect of business” in bookkeeping developed by Hendry
The day comes when the house bank wants its capital back. We speak, as I have said, of salvation, not of interest. The repayment is made only on the repayment of the original amount, not on the interest due.
As a result of the associated reduction in bank liabilities, foreign capital on the right flank is expedient. While this is comfortable, short-term assets, especially the account from which the repayment has been made, are reduced on the right-hand side of the contract. The impairment of both an asset and liability account reduces the balance sheet total. The balance is getting smaller.
Wait, could you say that we have to give away something and lose value? It should also be noted here that in the case of a pension, ie a regular, constant payment that includes an interest component and a repayment component, the repayment is cautiously disclosed separately as a reduction in debt and the interest charge as an expense.
The repayment causes the group to lose a lot of capital, which reduces liquidity. This has the repayment of interest together with the payment of interest, the cash outflow, and it differs only in the impact on the result. Commercial nature of a repayment: debt capital (loan liabilities) to current assets (bank) with liquidity effect, but without effect on profit.
Repayment of the loan is no longer possible
Today, borrowing is no longer an issue for many people. It is also quite possible that multiple loans may be used simultaneously, perhaps not simultaneously, but in quick succession after the first one has been paid out. Taking out a loan is not a disadvantage in most cases. However, the loan must be well calculated and you must consider which monthly installments you can afford, so that not only the corresponding loan repayment, but also incurred borrowing costs can be paid What happens, however, when the installments are no longer due?
It is important to distinguish between the different causes why the loan can not be repaid. If, for example, the cause is work-related, this misery is not such a big disadvantage. If the client does not always pay on time, then you know that you will receive it and that you can repay the loan volume.
There is also the possibility to reduce the monthly installments until further notice in order not to claim your own money as much as possible. In cases where you can no longer pay the loan installments, it is important that you consult with your lender as soon as possible. Otherwise, it can come to a nasty surprise, if the monthly installments do not occur.
Such a surprise would be that the loan business is terminable and pending payment. In the next step, if the loan transaction has already been terminated and the due date has already passed, as well as written reminder letters from the lender are unsuccessful, a reminder can now be issued which is followed by a writ of execution at short intervals.
If the borrower does not have the option of seizing valuables, the bank account or the salary is seized. As a result, the house bank at least receives installment payments, which also repay the loan volume. This is the usual procedure for a normal loan transaction, if the monthly installments can not be paid by the debtor.
Another possibility is when the lending business is a personal loan for a property. If there is no repayment of the mortgage loan, compulsory auctioning is the standard way for the lender to obtain the borrowed capital. In the case of a foreclosure auction, the property is valued and a minimum offer is then determined by the house bank.
Afterwards, the building will be opened for auction and goes to the highest bidder. The proceeds from the auction will be used to repay the former loan, but can not be fully repaid. The remainder must then be repaid by the former borrower, although the building for which the loan was previously intended, no longer exists.