What will happen to microfinance?

Consequences of non-repayment of small loans:

1. generates high overdue interest. If the borrower fails to repay the loan in time, it needs to bear additional overdue interest, penalty interest and liquidated damages.

2. If the credit is damaged and the circumstances are serious, it can be included in the list of people who have lost their trust;

3. Being harassed by the collection, not only the borrower himself, but also his family members may be harassed by the collection phone;

4. The lender brings a civil lawsuit.

legal ground

Article 585 of the Civil Code of People's Republic of China (PRC)

The parties may agree that when one party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the situation of breach of contract, and may also agree on the calculation method of the amount of compensation for breach of contract.

If the agreed liquidated damages are lower than the losses caused, the people's court or arbitration institution may increase the liquidated damages at the request of the parties; If the agreed liquidated damages are excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce them at the request of the parties.

If the parties concerned pay liquidated damages for delayed performance, the breaching party shall also perform the debt after paying the liquidated damages.