What are the charges if the borrower misses a monthly payment?
The repayment due date typically falls on the first day of the month. A loan installment is overdue when the borrower fails to pay in full after the 7-day grace period. From the 8th day, the overdue amount is charged daily at prevailing interest rate plus 3% p.a. or more, counting from the due date until the overdue amount is paid.
For example, the client pays on the 8th day. The late payment charge = $500 * (15% + 3%) / 360 days * 7 late days = $1.75. Late payment charge is billed on the following month.
If the borrower misses three monthly payments in a row, the prevailing interest rate will be increased by 2% p.a. or more. For example, instead of paying interest at 15%, the borrower will pay at 17% for the remaining outstanding amount.