Most consumer loans amortize over 30 years, leaving little or no balance at maturity. As a result, accepting payments after maturity is usually not an issue. But many business-purpose and commercial loans require only interest payments, leaving a large balance due.
Lenders often work with borrowers to extend the loan, modify its terms or pursue alternatives to foreclosure. Many of those alternatives involve accepting partial payments. So, when does accepting a post-maturity payment unintentionally extend the term of the loan?
Those who have serviced loans with balloon payments have likely faced situations where the loan has matured, but the borrower has failed to remit the full payment owed. Instead, a partial payment is submitted, leavin...
