What Happens If I Don’t Pay My Loan?
Cannot pay your loan?
When you take a loan with us you become a Hoot member. Being a Hoot member means you are part of a community that encourages good money management, active saving and responsible borrowing. We have a responsibility to make sure our members’ money is safe and well managed, and that you are repaying the money you owe.
We know that from time to time people may struggle with money because of the demands of everyday life. Loss of your job, unexpected expenses or other circumstances can sometimes overwhelm you and cause worry and stress about how you can keep up with payments. Sometimes we know that it is a short term problem and you just need a little time to get back on your feet.
What will happen if you don’t repay your loan?
You will go into arrears
If you stop paying your loan, it will go into ‘arrears’ meaning that you are behind with repayments. If your loan goes into arrears you will not be able to take out any savings you have in your account, or apply for another loan.
We will try to contact you
We will try and contact you by telephone, text and email so we can talk about why you are not paying and come up with a solution.
We will send letters
If you don’t respond to our calls and texts we will send a series of letters explaining the consequences of not paying, and what may happen next if you don’t respond.
We take your savings
If your loan goes into default, we will take any savings you have to offset some of what you owe us before we take enforcement action. Our right to take the savings is included in the terms and conditions of your loan.
You will default
If we still get no response, then we will put your loan in ‘default’. This means that you have not made any attempt to repay and we may take legal action to recover the money you owe us.
This might be in the form of a court order, attachment of earnings or a deduction from your benefits.
Court action
Any missed payments and court actions will show on your credit report, making it difficult for you to get affordable credit elsewhere, or to get any further borrowing from us.
Talk to us
It is important that you contact us straight away if you are struggling with your loan repayment. It is better to talk to us as soon as you can so don’t be embarrassed about contacting us. We will be happy that you have contacted us to put things right.
Get help
If you have tried to bring your household finances under control but are struggling to make it all add up; don’t ignore it. Getting help sooner rather than later is important
Make sure you contact charities or organisations that give free guidance and advice. There is no need to pay for help with debt.
Take control
Keep a spending diary – write down everything you spend in a month including bills, cash spending and anything spent on your credit or debit card.
Having a true picture of what you spend will help you to make changes.