03 JUN

If the debt has been compensated, does it mean that there is no need to repay it? What is compensation?

  • Life Style
  • Ishara
  • Apr 02,2024
  • 1


Bad credit is not only caused by overdue records in the credit report. When there are records of repayment of debts, bad debts,ofw loan without ccsl etc. in the credit report, it will also lead to bad personal credit of the user, and repayment of bad debts is even more serious than overdue records. So what exactly does it mean to have reimbursed debt for bad credit in the credit report? The following is analyzed by the author.

1. What does it mean to have debt repayment for bad credit?

Bad credit repayment debt means that when the borrower is unable to repay the debt, the insurance company or guarantor repays the loan.personal loan calculator At this time, the lender's creditor changes from the lending institution to the insurance company or guarantor. The person, the insurance company and the guarantor all have the right to collect the recovered money from the debtor at this time.

2. Why is the insurance company or guarantor responsible for compensation?

Many financial institutions require applicants to pay premiums when taking loans, mainly to reduce loan risks and avoid lenders from causing financial losses to the bank when unexpected situations occur during the loan process,student loan such as being unable to fulfill their repayment obligations due to disability, death, etc. Therefore, when applying for a bank loan, the bank will require the user to purchase an insurance policy. After the lender buys insurance, if an accident occurs during the repayment process and the loan is unable to be repaid on time, the insurance company will repay the bank loan for the lender according to the insurance contract.

Loan contracts are generally civil contracts. As long as it does not violate laws and regulations, both parties need to abide by the contents agreed in the contract. The insurance that needs to be purchased during the bank loan process is a voluntary choice of the lender and is not a mandatory requirement. Simply put, if the bank compulsorily requires the purchase of insurance, the lender can refuse to sign the contract. (Generally in the first period or the first few periods, the relevant fees are deducted from the repayment, or turned into interest and integrated into the interest rate, which is attached to the electronic contract and signed by the customer. If the loan is not signed, the loan will definitely not be granted.) However, if the lender If you accept the requirement to purchase insurance and sign a loan contract and pay the premium, then the provisions in the loan contract will be protected by law.

It should be noted that after some lenders purchase loan insurance, if the lender is unable to repay the bank loan, the insurance company will need to repay the loan on behalf of the lender. Once the insurance company repays the loan, the lender's creditor is transferred from the bank to the insurance company. This kind of loan repayment behavior is also called reimbursement, and the insurance company repays it on your behalf.

3. Which is more serious, debt repayment or overdue record?

Compensated debts are more serious than overdue records. Before the debtor pays off the compensated debts, the compensated debts will remain in the credit report, which has a great personal impact on the user. Although bad credit records are automatically deleted once every five years, the premise is that the amount has been paid off. Records of unpaid debts will always remain in the credit report. After that, any credit business that the user wants to apply for will be rejected. It is basically impossible to apply for credit business until the compensation record is deleted.

4. Do I need to pay back the compensation?

Yes, someone else repaying it for you does not necessarily mean that the loan does not need to be repaid. The repaid debt is still your overdue debt, but the object of repayment has changed. The lender still needs to repay the same amount of the loan. funds. Only when the borrower returns the money to the reimbursement agent will the overdue bad record be deleted. Otherwise, it will exist permanently, and there will always be a stain on the user's personal credit. Not only that, penalty interest is still required to repay debts, and this continues on a daily basis. The longer the overdue period is, the more overdue penalty interest will be accumulated.

5. Will I still be sued if I pay compensation?

Yes, for example, you may still be sued after paying off an online loan. After compensation, the insurance company will collect the debt from the debtor, usually through phone calls, text messages, etc., and may further collect the debt at the door. When the debtor continues to refuse to repay and the payment is overdue for more than 3 months, the insurance company may sue the debtor.

Generally speaking, when the overdue payment exceeds 3 months, the lending institution has the right to sue, so the insurance company can sue after 3 months. After being sued by an insurance company, you will receive a text message about filing a case, followed by a summons from the court. Once the case is accepted, the lawsuit will officially begin. And after the court judgment, if the debtor is capable but refuses to repay, he can apply to the court for enforcement, and then the bank cards, real estate, and cars in the name of the debtor will be frozen. The court will then auction the items and use the proceeds to repay the loan.

Those who refuse to enforce the law after being enforced by the court will be included in the list of dishonest persons to be executed. This list will not only have an impact on their daily lives, but will also have an impact on future generations, such as affecting civil servants/military political review, and affecting future studies in private aristocrats. School etc. Therefore, users must repay the loan in time after taking the loan. Even if it is accidentally overdue, they must pay off the debt as soon as possible. The longer the overdue time, the greater the impact.

6.How to deal with

It is natural to repay debts, but many people cannot repay on time due to many reasons. At this time, many creditors use all kinds of tricks to compete with creditors and debtors to see who has more imagination and better tricks. You have a good plan, I have a ladder to cross the bridge. Going back and forth, twists and turns, if you want to return to normal life, you still have to settle your accounts. Although it is a long road, I still have to think more about my family’s future.