In life, there may be cases when paying on recently taken loans is not so difficult, but almost impossible. Any borrower knows what this may threaten: a lawsuit, a list of property and the enforcement of debts by bailiffs. According to modern legislation, the court has the right to forcibly restructure bad debts. Fortunately, the banks themselves are not averse to offering this procedure to a problem borrower, unless, of course, he is interested in a lawsuit.
Credit Restructuring: What Is It?
When taking a loan, practically no borrower wants to face personal bankruptcy when it is not possible to pay on loan obligations. But alas, with every year the percentage of outstanding debt is growing, so many are asking a fair question: how can we minimize credit obligations and reduce the debt burden? Unfortunately, many still do not know about the procedure for reducing interest and interest. And many are asking such a question as credit restructuring. What it is? The purpose of the procedure is to renew the loan agreement, which revises the deadlines for payment and interest. Not to be confused with debt refinancing! When a loan is restructured, the contract can only be re-signed at the financial institution where the debt was taken, and at refinancing, at any other bank.
Restructuring Features
The loan restructuring program is universal, but the main reason for its launch is the presence of missed payments and delinquencies under the contract. Indeed, when refinancing, such nuances can become a reason for refusal, but they are only welcomed during restructuring. Moreover, the presence of penalties is the main reason for revising the terms of the contract with the borrower. Banks are not profitable for litigation, which entails a significant loss of time and an increase in the loan portfolio. In some cases, an increased loan portfolio carries an automatic decrease in banking indicators, and those, in turn, lower the rating of the institution.
The main reasons for the restructuring
To re-sign the agreement are:
- Loss of work by the borrower.
- Lower income.
- Severe illness of the borrower or family members.
- Other good reasons to significantly lower your income.
Benefits of Restructuring
For example, when a debt restructuring of a loan at Sberbank occurs, the benefits for a troubled borrower are obvious:
- The ability to maintain a positive credit history, subject to minor delays.
- The ability to prevent lawsuits that will greatly affect the psychological and emotional state of the debtor.
- If financial difficulties arise, re-signing a contract often provides an opportunity not only to maintain a positive reputation, but also to save one's money. By signing a more profitable contract with lower interest (banks are extremely reluctant to this condition, only in the most “difficult” cases).
- Avoiding personal bankruptcy by setting new payments and payment deadlines acceptable to both parties.
- Restructuring of debt on a loan at Sberbank provides an opportunity to completely get rid of accrued fines and penalties.
- Avoid communication and forced collection of debts by the executive service of the bailiffs.
The main types of credit restructuring
At the moment, there are several types of loan revisions under the restructuring program, namely:
- Extension, or change in the deadlines for the return of the occupied amount. For example, a loan was taken for a period of 5 years. After the extension, the final return date was changed to 7 years, while the monthly payment was reduced.
- Change of loan currency. This is not the most popular method with Russian banks, but, nevertheless, in view of the economic situation, it is increasingly used. It is approved only for bona fide borrowers, on conditions acceptable to both parties. In this case, the loan issued in US / European currency is replaced by rubles taking into account the exchange rate and existing interest.
- The possibility of obtaining a "credit vacation." Such relief is used by borrowers who have temporarily lost their jobs for a period of 3 to 6 months. To receive this service, you must contact the bank with the appropriate statement, after the approval of which the borrower gets the opportunity to temporarily not pay interest, but only the amount of the principal debt. There are no penalties.
- Full or partial deduction of accrued interest and fines.
- Decrease in interest on the loan. It is rarely used and only for reliable and trusted borrowers.
Debt restructuring benefits
If financial difficulties arise, you can conduct a painless re-signing of the contract on the most favorable terms. Credit Restructuring: What Is It? This is, first of all, an appeal to the bank with a corresponding statement with a request to review the terms of the loan agreement. For example, by writing an application for restructuring a loan, Sberbank (a sample will be provided by a branch employee) you will need to indicate the reason for such an appeal in it. And if the bank considers the reason valid, you will sign an agreement on more gentle terms.
General procedure for registration of restructuring
When applying and completing the restructuring procedure, there are general rules for all financial institutions, which may differ slightly. Before you make a restructuring of the loan, you must prepare the following package of documents:
- Passport of a citizen of the Russian Federation.
- An application for restructuring a loan from Sberbank, a sample of which the institution manager will give you.
- The original of the work book with a note on the dismissal or reduction of salary.
- Certificate of salary for 6 months from the last place of work.
- Mandatory original certificate from the district employment service, which should contain information on the date of registration and the amount of the monthly allowance (if any).
- Consent of spouse to debt restructuring.
This entire list of documents is necessary in order for the bank to ascertain the borrower's temporary incapacity for work and decide in the positive direction the issue of credit restructuring. What it is, it becomes clear if a competent approach to all stages of the collection of documents and the signing of the relevant agreement.
When to apply for a loan restructuring
If you have troubled debts, you should immediately seek help from the nearest large branch of your bank. If this is not possible, you need to call the hotline and explain the situation in a telephone conversation. Most likely, you will be sent to the regional central office, to the specialist in credit debt, with whom you will continue to continue the dialogue. The most important thing is to contact the bank with a request to revise the loan agreement until the moment when large delays are formed and penalties are applied. If you apply in advance, there is a high probability of revising the contract on the most favorable terms for the borrower, without fines and penalties.
If you have financial difficulties, immediately contact the nearest office for help. Banks themselves are not interested in the accumulation of bad debts and subsequent litigation.
Restructuring Bad Debt
When. if your debt has become problematic and interest and fines have already run up, banks can offer you a restructuring, but with a small peculiarity. When restructuring bad debts, banks reluctantly write off fines and penalties, so they try to pay the full amount to the loan agreement. When signing, pay attention to this. With your disagreement, banks sometimes go towards borrowers, reducing or writing off fines and penalties. At this stage, banks offer restructuring, as the last step towards the borrower before filing the court documents.
Consumer loan restructuring
This type of restructuring is the most popular in the domestic lending market. The process of restructuring a consumer loan is very simple, does not require additional documents, and banks look at it through their fingers. Consumer loans include: credit cards, amounts taken on equipment and other small goods worth up to 1 thousand dollars. Most of all restructuring agreements are consumer loans for small household needs.
The restructuring procedure is simple, banks are willing to meet, and most importantly, the borrower should not be delayed in resolving the issue. After all, the sooner you turn to a financial institution, the better conditions you can provide for yourself.