If you're considering applying for a small credit loan, you might have the question: “Shall I make every repayment on time? If I'm late, will interest continue to rise?" Don't worry, let me show you the mystery。

Will interest increase after the delay

Indeed, in most cases, once your loan has expired, banks or other financial institutions will continue to charge interest at pre-set rates. In other words, if you fail to pay off the overdue loans immediately, interest will continue to increase. But you need not be overly anxious, because there will be a series of measures to prevent the endless increase in interest。

One of the consequences of long overdue periods could be that interest rates would begin to slow down. Why? This is because financial institutions may introduce policies to moderate interest growth, such as freezing interest or granting a grace period. Furthermore, if your loan is seriously overdue, there may be legal proceedings or an asset freeze, which may further affect the increase in interest。

WHAT WOULD BE THE SPECIFIC COSTS OF LATE LOANS? IT IS BROADLY DIVIDED INTO FOUR PARTS: OVERDUE PRINCIPAL, INTEREST RECEIVABLE DUE, COMPOUND INTEREST AND INTEREST PENALTY. ACCORDING TO THE CENTRAL BANK, INTEREST ON THE LOAN WOULD HAVE BEEN INCREASED BY 301 TP3T-501 TP3T FROM THE INTEREST RATE ON THE LOAN AS SET OUT IN THE CONTRACT. IF THE LOAN WAS NOT USED IN ACCORDANCE WITH THE TERMS OF THE CONTRACT, THE INTEREST RATE AT WHICH INTEREST WOULD HAVE BEEN REDUCED COULD HAVE INCREASED BY 50%-100% OVER THE CONTRACT RATE。

Thus, we can see that interest on overdue loans, as well as a penalty, would be a considerable expense. It would be difficult to figure out how much money it would take, and even worse, if you were past due, it would be difficult to apply for a loan later. Therefore, timely repayment is undoubtedly the most sensible option。