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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% or more, counting from the due date until the day the due amount is paid. 

 

For example, the customer pays on 8th day. Late payment charge = $500 * (18% + 3%) / 360 days * 7 late days = $2.04.

 

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 18%, the borrower will pay at 20% for the remaining outstanding amount.

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