Palmcredit, owned by Newedge Finance Limited, is an online lending platform that offers instant loans ranging from N5,000 to N300,000 to their customers to enable them to meet their financial needs.
Failure to pay the Palmcredit loan comes with lots of consequences, like blocking your account, increasing the loan interest, and reporting it to the credit bureau, among others. So, it is safe to say that defaulting on a Palmcredit loan comes with grave consequences. Hence, if any unforeseen circumstances occur that make you default on the loan, it is best to contact the Palmcredit customer care unit and explain to them why you’ve paid and plead with them to extend your grace window.
Why Should You Pay Your Palmcredit Loan?
It is very important to pay your Palmcredit loan by its due date to avoid the negative impacts that are associated with defaulting. There are numerous benefits that come with repaying your loan on time, like building your credit score and creating a good relationship with the loan platform, which will definitely help you to build your credit score and increase your credit limit.
What Happens If You Don’t Pay Your Palm Credit Loan?
Defaulting on your Palmcredit loan comes with lots of consequences. Some of the negative things that will happen when you fail to pay your PalmCredit loan are outlined below:
1. Disabling of your Palmcredit Account
Blocking your Palmcredit account is one of the consequences that come when you default on your loan. Once you fail to repay your loan, Palmcredit may close your account. Once your account is blocked, you won’t be able to perform any transactions with it again.
2. The Loan Interest Rate May Be Increased
An increase in the loan interest rate is another thing that may happen when you default on a Palmcredit loan. Although the percentage by which the interest rate may be increased is not fixed, it is certain that when you fail to repay your debt as agreed, the interest rate will definitely increase.
3. Report to the credit bureau
Reporting a loan defaulter to the credit bureau is one of the major things that will happen when you fail to pay your loan. If Palmcredit reports you to the credit bureau, you may be blacklisted and barred from accessing loans from any financial institution in the country until you pay off your loan with the interest that it may have incurred.
4. Your Credit Score will be affected Adversely
Once you fail to repay your loan, your credit score may be negatively affected. A credit score determines creditworthiness; if your credit score is negatively affected, it gives you a bad reputation, hence reducing your chances of accessing loans in the future.
5. Calling of Contact
Another thing that may happen if you default on your Palmcredit loan is that they may start calling contacts on your phone and informing them of your debt status. This is usually disgraceful and embarrassing because both your friends and family members will be aware that you’re owing a fintech company.
6. Legal Action
Once Palmcredit finishes all the measures outlined above and you still fail to repay your loan,. They will take legal action against the loan defaulter. They will arrest such a person with a security agent and take the person to court; if found culpable, the person will be convicted in line with the constitution.
Does Palmcredit lock phones?
No, Palmcredit doesn’t lock phones for defaulting loans. However, if you fail to repay your loan by the due date, Palmcredit may employ different measures to retrieve your loan, like increasing the interest rate, reporting to the credit bureau, and blocking your account, among other adverse measures.
Does Palmcredit Call Contacts?
Once you pay your Palmcredit loan at its due date, Palmcredit will never call your contacts. However, if you default on your loan and fail to pay it on its due date, Palmcredit will call some people on your call list. Not only that, they may also send text messages to your contacts informing them that you’re owing them.