Lenders don’t set out to lend money to people or businesses who don’t pay it back, but default rates tell a different story. Loans in every category have high default rates: one in six SBA loans from 2006 to 2015 went into default. One out of every 10 Americans has a defaulted student loan. In 2018, the mortgage delinquency rate was 4.4%.
The story these numbers tell us is that the lending industry is once again facing a large number of delinquencies, and with so much unpaid debt, a financial institution can either attempt to recover the debt, sell the debt at a significant loss, or simply write it off.
Litigation is usually an expensive option for recovering that debt, but arbitration can be more cost- and time-effective and may have better results. Especially online arbitration services that utilize technology to streamline and accelerate the process.
The question is: do you have the correct arbitration provision in your financial contracts?