First of all, it is clear that as long as the borrower handles business with financial institutions such as banks through normal channels and uses real information to obtain loans, it is only an economic contract dispute.
Economic disputes will not bear criminal responsibility and will not be sentenced and punished.
There are loans from banks and financial institutions as well as credit loans from non-governmental organizations in the market. If the loan is secured by mortgage, once it is overdue for a long time, it will be collected first, and then the mortgage will be frozen. If it has not been repaid, the collateral will be sold to reduce its economic losses.
The situation of micro-credit loans is different, because when applying for loans, they are obtained by their own personal credit information, and there is no collateral. If the borrower owes money and fails to pay it back, banks and private institutions have different ways to deal with it.
Bank:
Generally speaking, banks will not go through legal procedures easily. Once overdue, they will first make a dunning by sending a text message, making a phone call, visiting the house, etc., and there will be a penalty interest during the period.
If the overdue time is too long and the amount is too large, you will be prosecuted. Many people owe tens of thousands of dollars, and the bank will definitely go through legal procedures. Once you are sued, the court will freeze your property and recover it.
If you haven't paid your bill for more than three months, it's very serious. If the loan bank collects the loan according to law, it will bring a lawsuit to the court according to the loan contract and guarantee contract (mortgage or pledge contract), and the court will take measures such as property preservation, including freezing the deposits in all bank accounts of the lender and loan guarantor and sealing up the pledged property.
After the judgment is made, the property will be enforced according to law (deducting deposits, auctioning collateral, etc.). ) to repay the bank's loan losses. Specifically, it includes: loan principal, loan interest, overdue interest, penalty interest, and all litigation costs arising therefrom, and related expenses incurred when disposing of pledged property.
The consequences of defaulting on bank loans are:
1, a penalty interest will be generated and 50% interest will be charged. Although the policies of each lending institution are different, on the whole, banks will be more accommodating than small loan companies. Credit loans overdue, the lender will first collect the loan, remind the borrower to repay, and the interest rate will rise as a daily penalty.
2. Bad credit records will affect future loans and credit card processing. Every day after you are overdue, your name will appear in the internal system of the bank at the same time, and then the president and risk control will see it.
After the deadline, the credit report will inevitably leave a bad record. Once you leave, it may last for three to seven years. If you want to borrow from other banks in the future, you may not be able to apply easily because of bad credit. If the overdue situation is serious, the mortgage and car loan will be affected in the future. Penalty interest is only the loss of money, while bad credit records are the loss of intangible assets, and the impact is irreparable by money.