This are the rules and guidelines that define how a borrower repays their loan.
Repayment schedule policy-this explains when and how often payments must be made
Lump sam payments at the end of the year-this method is for business loans only.Monthly repayments-this type of repayment policy is for individuals because they are
Interest rate policy- this defines how interest is charged on the loan
There is a fixed internet rate ,which is 35% of any amount one takes.
Grace period policy-a grace period is extra time given before a payment is considered late.
it takes 5-10 days after due date before penalty applies.
Late payment penalty- this policy applies when borrowers fail to pay on time.
fixed fee is P200 per late paymentif the borrower takes more than 10 days after the due date the loan interest will also be increased by 5%
Default policy- defines what happens if the borrower fails to repay completely
when a loan is considered in default is after 90 days unpaid.legal action will be taken against the client ,a court case will be opened against them meaning they will have to pay for the trouble the organization had to go through to force the borrower to pay and also pay double the amount they took of the loan plus the interest and the late payment fee.
Collateral and security policy-specifies assets used to secure the loan
propertyvehiclessalary-backed loans
collection policy- explains how the business follows up on payments
reminder messages and callsvisitsuse of collection agencies
Documentation policy-all repayment terms must be clearly written and agreed upon.
loan agreementsrepayment scheduleterms and conditions