Every year during the Summer season, many banks and other financial institutions issue lots of letters with the phrase” expired.” It is almost an annual ritual at the start of the Summer holidays. What does the term “"expired” mean? This phrase means that the bank is allowing the loan to lapse and it will not be processed. Most banks will let the loan lapse if it has been over a month and they still have not received the funds. They are only willing to allow the loan to lapse if they are unsure as to whether or not the funds will be forthcoming.
While it is true that you can close out your account and receive your funds on expiration of the loan, this is usually not a wise choice. Typically the bank is going to do an extensive review of your finances to determine whether or not you have sufficient funds to cover the debt. If you have a lot of outstanding bills, then closing your account would only make matters worse. And if you do close your account, you may be in for more problems than you bargained for when it comes to keeping the loan current.
You should avoid getting the “"expired” letters, especially if you do not intend to take out a new loan. The purpose of the letter is to scare the borrowers into doing something to address the situation and get the funds to avoid the dreaded letter. Often times, people who do not take out a new loan and rather consolidate their debts may end up with some serious problems when the loan finally expires. The borrowers also are left with an additional debt and the result is more late charges. By contrast, by taking out a new loan you will be in a better position to make your payments on time.