Bayport Blog

Make a plan before you miss a payment

Money matters are not always plain sailing, but the good news is that when you hit stormy weather with your debt repayments, it is almost always possible to make a plan when you work with your credit providers. Let’s look at the debt solutions available to you.

Even people who work carefully and cleverly with their money can end up with a cash flow problem when something unforeseen happens. The choice between which bills to pay and which to ignore for a month or two can then be very difficult.

The first thing to remember in such a situation is that it is always better to look reality in the eye, rather than trying to hide from it and hoping that it will go away. When you have debt to repay, the problem will not magically solve itself.

The second thing to remember is that credit providers always prefer to know what is going on so that they can make a plan that will get them as much of their money back as possible. Even if you cannot repay all your debt, a debt solution that benefits you and the credit provider is better than a situation where the credit provider loses a lot of money and you end up with legal findings against you and a negative credit record.

Given these two facts, you should contact your credit provider(s) as soon as you realise that you may not be able to honour your repayments. Here are some of the options to discuss with them:

• Does your credit insurance policy cover the reason for your non-payment? Bayport’s credit insurance, for instance, will settle your entire Bayport loan in case of death, permanent or temporary disability, retrenchment/loss of income, or if you contract a dread disease like cancer. The policy will cover part of your instalments in case of compulsory unpaid leave, short-time, and hospitalisation.
• If your credit insurance does not apply, ask if your debt can be restructured by extending your loan period, which will decrease your monthly payments. Bear in mind that in the long run your loan will be more expensive as you pay the interest for a longer period. Therefore, increase your repayments again as soon as you can.
• If your Bayport loan is one of several loans you have, ask the agent about debt consolidation. Through this process, you take out one big loan to pay off all your smaller loans, leaving you with only one instalment to pay. Part of the consolidation process is negotiating settlement agreements with your existing credit providers. In many cases, in exchange for settling your loan earlier and in one go, the credit provider will give you a settlement discount. The discounts mean that your consolidated loan is often less than the sum of your existing loans, which means less debt to repay. Furthermore, make sure you negotiate the best possible interest rate so that your consolidation loan also costs you less than what your previous loans did. In addition to an immediately improved cash flow situation, you also protect your credit score by not missing any debt repayments.

As you can see, you do have options when tough times make it difficult for you to honour your debt obligations. The best course of action is always to acknowledge the situation and to ask for help.

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