Bad loans are what happens when you take out a loan and skip repayments. You end up being chased for money and you will not find it easy to borrow money in the future; simply put bad loans mean you’re a risk to lenders.
The good news is that if you’ve had bad loans and want a fresh start you can get it with lenders who don’t use credit checking. There’s a list of approved lenders HERE who will provide cash loans with no credit check for people with bad credit at fair rates to every applicant, and so it’s very easy to qualify and get cash, even when you have a history of credit and debt issues.
You can have bad loans, but what you can do is take positive steps to turn them into a learning experience.
Bad loans are loans were the debtor is not making payments. Banks will try to collect the payments and get the loans back to current state. However some of the loans will persist and eventually file bankruptcy. Banks will recover whatever they can from the mortgaged assets and write off the remaining amount as loss.
A person is always liable to payback the loan if he has the means. The bank can take the debtor to court and get a favorable ruling to recover their debt from any assets the debtor has. The only protection debtor has is when they file bankruptcy i.e their debts are more than their assets. The bankruptcy laws vary from country to country and so also the protection they offer. In recent times it has become tougher for people to write off their debt in a bankruptcy and you can still be liable for the debt even after bankruptcy. Just that the banks can’t come after you as aggressively until you start making some money.
Bad loan is a debt that is not collectible and therefore worthless to the creditor. Bad loan is usually a product of the debtor going into bankruptcy. Bad loans are non performing assets.
Bad governance,bad management and even corruption at Public Sector Banks were primarily responsible for the problem.The best solution to a bad loan problem is that the banks grow their loan portfolio at a brisk rate. As the denominator in the ratio of bad loans to total loans grows, the bad loan problem automatically diminishes in significance.