A Sad Reality
The larger banks decide for instance as in the case of one of my clients, that they no longer wanted to have loans extended to roadhouses or service stations in Central Queensland. Consequently, all service stations in the region that were banking with this particular bank had their loans recalled.
Clients in some cases are given a month and a half to refinance the loan otherwise he would be in default.
After a year of fighting with the bank, they eventually sold him up and instead of having nearly $1 million worth of assets he was left in his mid- fifties with not a cent to his name and no way of earning an income. This is how devastating circumstances can be if the bank decides to recall a specific loan.
I know that this was not an isolated case as I have spoken with other colleagues, industry professionals and associates who have witnessed similar circumstances particularly in rural South Australia in industry and in some business lending situations and occupations.
When signing a loan documentation, you also need to look at the documentation regarding your loan if it were ever to fall into default, in case you fall behind in your repayments.
Different financiers have varying timeframes before commencing default proceedings and all will charge a default interest rate that is usually around 12% to 16% at current interest rates. It is always a good idea to read and understand the documents you sign to know where you stand if different circumstances arise.
SEE A PROFESSIONAL FOR ADVICE