In the Philippines, the fate of anyone with an unpaid loan is to face severe effects. You'll have a lot at stake, and as a result, you'll be bothered by worry, sleeplessness, and other health problems. Hence, being complacent with your loan payments should not be an option.
So, why repay your loan on time? Here are some eye-openers to give you an insight into why.

Primarily, you'll save money and avoid future interest charges by making on-time loan payments. Interest charges do not purchase anything other than time. Therefore, if you do not repay the money you borrowed on time, you will incur greater interest rates and incur further debt.

Also, the asset is not yours if you haven't paid the total purchase price of a vehicle or house to the bank or creditor from whom you loaned money. If you neglect to fulfill your obligations, lenders can easily seize your house or vehicle, even though you've already paid a substantial amount for it. Depending on your loan, you could experience loan repossession or foreclosure.

Just about everything you do will have an impact on your credit score. This is the reality since financial institutions share information about your payment history with credit bureaus. A drop in credit score due to delay or default will severely limit your future loans and other forms of credit. Lending institutions in the Philippines must report delinquent loans to the Credit Management Association of the Philippines (CMAP), which then calculates credit scores and establishes fines that can prevent you from making new loans.

If you have money, paying off loans on time is generally a wise option. You experience actual financial benefits plus the psychological advantages of being debt-free.