1, penalty interest and liquidated damages. If the loan is not repaid, the first thing you encounter is a high penalty interest. Some financial institutions need to pay fines on the basis of penalty interest. These expenses add up to a lot of money.
2. Credit damage. If you don't pay back the loan from the bank within the time limit, your personal credit report will be stained, and it will be even more difficult to apply for credit cards and loans in the future.
3. Collect in various ways. Banks and small loan companies have their own collection systems. Novices will send you text messages and call you to collect money. In serious cases, there will even be a collection staff pressing you around the clock, which will seriously disrupt your work and life.
If sued, the assets may be confiscated. Financial institutions will also arm themselves with laws. If you don't pay the arrears, you will be prosecuted if the amount is relatively large.
If the circumstances are serious, you will go to jail. Generally speaking, such incidents as non-repayment of loans are civil disputes and will not rise to the criminal level. However, if the borrower refuses to implement it, it will be considered as a deadbeat and would rather run away than pay back the money. If the circumstances are very bad, the court will also investigate the criminal responsibility of the borrower, and if it is too serious, it will go to jail.
Extended data:
Risk prevention of small loans;
First, review risk: the emergence of loan risk often begins at the stage of loan review. From the disputes in the comprehensive judicial practice, we can see that the risks in the loan review stage mainly appear in the following links.
(a) the review content is omitted. Loan review is a meticulous work, which requires investigators to systematically investigate and inspect the qualifications, qualifications, credit and property status of loan subjects. In practice, the loan examiners of some commercial banks failed to disclose one thing, which led to credit risk.
(2) There is no due diligence in practice, and loan examiners often only pay attention to the identification of documents, but lack due diligence, so it is difficult to identify fraud in loans, resulting in credit risk.
(3) misjudgment, the bank did not listen to the opinions of experts on the relevant content, or professionals made professional judgments. In the process of loan review, we should not only find out the facts, but also make professional judgments on relevant facts from legal and financial aspects.
Second, the legal content of the pre-loan investigation:
(1) Review the legal status of the borrower, including its legal establishment and continuous and effective existence. If it is an enterprise, it shall examine whether the borrower is established according to law, whether it has the qualification and qualification to engage in relevant business, and check the business license and qualification certificate, and pay attention to whether the relevant certificate has passed the annual inspection or relevant verification.
(2) Regarding the credit standing of the borrower, check whether the registered capital of the borrower is suitable for loans; Examine whether there is a clear situation in registered capital flight; Past loans and repayments; And whether the borrower's product quality, environmental protection, tax payment and other illegal conditions may affect the repayment.
(3) Regarding the borrower's loan conditions, whether the borrower has opened basic deposit account and general deposit accounts in accordance with relevant laws and regulations; Whether the foreign investment of the borrower (such as a company) exceeds 50% of its net assets; Whether the borrower's debt ratio meets the requirements of the lender.
(4) Regarding the guarantee, if it is a guarantee, the qualification, reputation and performance ability of the guarantor shall be investigated.
Third, the borrower and its responsible person should also be specially examined. In order to reduce the moral hazard of the lender, the borrower and its responsible person should also be specially examined. When granting loans, financial institutions should not only examine the qualifications, conditions and operating conditions of borrowers, but also strengthen the examination and control of the personal qualities of investors, legal representatives of enterprises and key management personnel, including:
(a) the chairman, general manager, factory director, manager and other key personnel who engage in gambling, drug abuse, whoring, keeping mistresses, frequenting dance halls, saunas, arranging weddings and funerals, buying luxury cars disproportionate to their economic strength, and frequently renting luxury hotels must be strictly controlled.
(two) loans to family business groups or companies must be strictly controlled. The so-called family group or company refers to an enterprise in which the main leaders of the group and its subsidiaries or branches and the main leadership positions within the enterprise are all or mainly held by blood relatives and their families and relatives.
(3) If the legal representative holds a foreign passport or permanent residence in a foreign country, and his enterprise or company has branches abroad, he should strictly control the loans of enterprises whose main family members have settled abroad or set up companies abroad, and pay close attention to the financial transactions of his legal representative with enterprises abroad. Especially for the transfer of funds abroad or the use of funds is unknown, it is necessary to strictly review, supervise and stop them in time.
(four) to investigate the part-time job of the legal representative of the enterprise before the loan. Loans to affiliated enterprises where one person concurrently serves as the legal representative of several enterprises must be strictly controlled.
(5) When examining the loan, we must consider the borrower's qualifications, conditions, operating conditions, repayment ability and the quality of the main person in charge of the enterprise. The borrower's political status as a "model worker", "advanced element", "overseas Chinese", "NPC representative" and "CPPCC member" shall not be used as an excuse to lower the loan conditions or illegally issue and manage loans.
(six) the loan relationship only occurs between the parties. For loans that are greeted, written or used by leaders, relatives, friends, classmates and comrades-in-arms, the review of loan conditions shall not be relaxed. Do not meet the loan conditions, no loans.
(seven) when issuing secured loans, the relationship between the borrower and the guarantor should be carefully investigated. The borrower and the guarantor belong to the same group company, and the loan should be strictly examined. The guarantee provided by the branch of a non-independent legal person is invalid.
Four, loan review recommendations:
Carefully examine each loan, and do not base the risk judgment of the loan on past examination or credit. Just because the borrower repaid the principal and interest on time in the past, the review or investigation procedures should not be relaxed. Establish a fixed-term appointment system for the legal representative of the borrower and its main management personnel. The appointment period can be determined according to the size of the loan amount and the changes in the production and operation of the borrower. If the loan amount is large, the appointment period should be shortened accordingly.
Loan officers (loan officers, members of the credit review team and members of the credit review committee) shall not engage in improper private contact with borrowers in loan activities. Credit officers and their immediate family members shall not accept the borrower's cash, precious gifts, shopping vouchers, etc. ; Shall not participate in recreational activities paid by the borrower; No expenses shall be repaid to the borrower.
For loans with large loan amount and long term, or loans used by borrowers for specific purposes, lawyers, accountants and other professionals should be hired to make professional judgments and provide expert opinions on related matters.
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