Loans can be extremely exhausting to pay back. As much of boon loans can be for working-class families and students, it is always deadly tiring when it comes to repayment. Often debtors can surge into trouble and find themselves incapable of paying their loans back. Repayment assistance plans help such debtors to repay their loans without losing their collateral. In simple terms, it helps them avoid bankruptcy. The scheme is quite popular in countries like Singapore and Canada. Many debtors saved themselves through this scheme.
RAP- it’s an overview and how does it help?
Repayment assistance plan shortly abbreviated as RAP. By registering themselves to the plan one can avoid bankruptcy by agreeing to the terms and conditions of the creditors who offer the plan. The scheme generally offers to pay the expenses of the debtor needed for the restart of their business on the promissory notes that they will repay them within the repayment duration which is usually less than 5 years. Though, certain criteria are needed for eligibility for the scheme.
- Budget limit- few creditors do not offer the scheme if the debt is larger than the certain limit they have set.
- The Lawsuit- the debtor should not have any previous lawsuits in his history
- The Previous history with bankruptcy- the debtor should not have any previous experience of bankruptcy and debt.
- Income- the debtor should have a regular income or a stable job to ensure repayment of the loan.
The scheme differs in countries. The details discussed above match the criteria of Singapore. However, in Canada, the scheme is generally for student loans, where the government offers to pay their loans and charges them with interest in the later earning stages of a student.