3.

Renewal/ Extensions of Loans

a) Renewal
- presupposes that the loan has been paid and the borrower is requesting for the
restoration under the same terms and conditions.
b) Extension
- presupposes partial payment on principal another interest; the borrower is
requesting for extension to prolong the payment.
4. Collection Process
The Term as specified in the loan is a fixed portion or the due date that the loan
must be paid. Thus for every credit granted carries with it a term agreed by the debtor
who may pay in full or on a staggered basis. He is even allowed to prepay his loan
before maturity date.
If you havent paid your bills or debts soon after the due date, your creditor will
probably send you formal notices or letters requesting prompt payment. Debt collectors
and creditors may also commence a process to recover the debt by initially starting
to call you and demanding payment.
The Stages of Collection Process
1. Sending of Notice of Collection/ Telephone Follow-up
Reminder to the borrower (one week before the due date)
2. Sending of Past Due Notice/ Telephone Follow-up
A) 1st ast Due Notice
One day after the due date
B) 2nd Past Due Notice
One week Past Due
C) 3rd Past Due Notice
At least one (1) month Past Due
D) 4th Past Due Notice
More than one month Past Due
3. Demand letter must be sent and must be complemented by telephone calls
as well as sending bank collectors.
A letter of demand comes from your creditor or debt collector and usually warns
that if you dont pay the debt within a certain time period (often seven days) they
intend to sue you in court to recover the debt.
4. Past Due
A loan payment that has not been paid as of its due date. A borrower who
is past due may be subject to late fees, unless the borrower is still within a grace
period. Failure to repay a loan on time could have negative implications for the
borrower's credit status or cause the loan terms to be permanently adjusted.

How a customer is treated on a past-due payment will often come down to

their payment history; if there is a pattern of late payments, the grace period may
be shortened or removed.
5. Items in Litigation
When collection becomes impossible, the loan is referred to the legal
Office/ Department who shall initiate legal proceedings against the borrower.
The term debt litigation can refer to a couple of different kinds of legal
actions. In some cases, debt litigation is a type of lawsuit filed by a creditor in
order to recover delinquent payments from a debtor.
Interest
-is a charge on borrowed money. It is the charge for the privilege of borrowing money,
typically expressed as an annual percentage rate.
Interest Rate
-is the percentage on the amount of borrowed money. The amount charged, expressed
as a percentage of principal, by a lender to a borrower for the use of assets. Interest
rates are typically noted on an annual basis, known as theannual percentage
rate (APR).