What will happen if I don't pay my Shopee loan?

Consequences of Defaulting on a Shopee Loan

Shopee loans, like any other financial obligation, come with strict repayment terms. Failure to meet these requirements can result in severe consequences that can impact your financial well-being.

Daily Interest Penalties

The most significant penalty for defaulting on a Shopee loan is the accumulation of daily interest charges. These penalties start at 8% per annum and continue to accrue daily from the date of the missed payment until the debt is cleared. This can lead to a substantial increase in the amount you owe over time.

Example:

Let’s say you have a Shopee loan of Php 5,000 with a monthly interest rate of 1%. If you fail to make a payment, you will incur a daily penalty of:

Php 5,000 x (8% / 365) = Php 1.10

This penalty will continue to accrue daily, resulting in an additional Php 33 per month in interest alone.

Impact on Credit Score

Defaulting on a Shopee loan also negatively affects your credit score. Credit scores are used by lenders to assess your financial reliability and determine your eligibility for future loans. A low credit score can make it difficult to obtain financing, secure credit cards, or rent an apartment.

Legal Action

In severe cases, Shopee may take legal action against borrowers who default on their loans. This could involve filing a lawsuit to recover the outstanding debt and any associated penalties. Legal fees and additional charges may further increase your financial burden.

How to Avoid Defaulting

To avoid the negative consequences of defaulting on a Shopee loan, it is essential to:

• Set up automatic payments to ensure you meet all payment deadlines.
• Track your expenses carefully and allocate funds to loan repayments accordingly.
• Contact Shopee’s customer service immediately if you anticipate any difficulties making a payment. They may be able to help you find a solution.

Remember, defaulting on a Shopee loan can have serious financial implications. By following these guidelines and taking proactive steps to manage your repayments, you can avoid these costly penalties and protect your financial well-being.