There are many different crisis situations in life , the consequence of which is the deterioration of financial opportunities. This can be a loss of work, a serious illness, the disappearance of a source of income. And if for everything else you need to pay a loan, then it's time to go to the bank and agree on a debt restructuring.
According to the borrower, this procedure is considered too complicated and bureaucratic. However, this is not the case. Sometimes, restructuring a loan for a bank is a better way out of the situation with the borrower than going to collection services or going to court. Moreover, if the borrower has a good credit history and does not refuse to pay his debt.
What is loan restructuring?
According to bank employees, the so-called “Workout tool” is a rather complicated topic of financial and mathematical relationships. Sometimes even experienced banking experts in it "float". Credit restructuring is an opportunity to reduce the debt burden in the form of a decrease in the amount of monthly payments. At the same time, the terms of the loan agreement are changed, where the fact of the concession or advantage that the bank is making is recorded.
Restructuring schemes
At the moment, the bank applies several standard options for changing payments and revising a debt agreement. An extension of the loan term is one of the typical schemes of a credit institution. In this case, credit restructuring is possible only on condition that the time limit does not exceed that provided for this product. So, for example, if a borrower has a loan to purchase a car for 5 years, and the maximum allowed period is 7 years, then it can be extended only for 2 years.
The next way to facilitate payments is to defer repayment of the amount on the loan body, or the so-called "credit vacation". Each bank in this case has its own program, which is designed for a period of 3 months to six. For a longer period, the
extension of the contract is executed if the client expects to sell any property or receive income from it, which has documentary evidence. But in any case, if payments on the body of the loan are suspended, the borrower must pay interest on a regular basis.
Restructuring of a loan may occur by changing the repayment schedule. Or in this case, a combined method of repayment is applied (at the request of the client). Alternative methods of debt restructuring include a reduction in interest rates and the abolition of penalties. For each case, the bank resembles individually.
Credit restructuring - these are additional conditions attached to the main contract with the bank. And everything is signed strictly by mutual agreement of both parties. However, after signing the restructuring agreement, in no case should you relax. From this point on, the borrower and his loan are considered problematic. Of course, there will be no annoying phone calls, bailiffs will not visit, but in any case, the bank service for managing late payments will have such a client "in pencil".