People who have a credit card, or ask for a loan, they have a certain term to make their payment to the financial entity with which they signed their contract; however, not doing so could bring consequences to your pocket.
Making a credit payment after the term indicated by a financial institution could mean an extra charge to your debt, regardless of the interest generated: the collection expenses.
What are collection costs?
Collection expenses are a commission that any banking institution can charge you for not complying with an established payment, either before the due date or if you make a transfer with an amount less than your debt.
BBVA points out that said charges can be applied to balances on a credit card, mortgage or any requested loan. “The charge is regularly equal to a percentage of the overdue balance or, commonly, to a set fee”.
In this way, banks charge a additional commission that is added to the interest that is generated, as well as to the balance that you have outstanding.
The collection expenses are specified in the credit contract, in the collection policies section, together with the calculation of the default rate and it is usually higher than the interest rate of the loan. For example, in BBVA this fine is for an amount of 418 pesos.
This extra charge can also cause you to obtain negative points in the Credit Bureau.
How to avoid collection costs?
To avoid making a payment greater than your debt, experts recommend deposit or transfer full payment, corresponding to each month within the payment deadline date. This will also prevent interest from being generated.
In the same way, it is necessary to make a budget of your monthly expenses so as not to require loans, or to request only the amount that is within the reach of your personal finances.