Taking on credit obligations, we cannot always predict how our life will turn in the future. If you have financial difficulties, lenders usually offer the effective way out. In most cases, the problem can be solved by restructuring the loan, that is, by changing the conditions of the loan agreement in this way, to alleviate the financial burden of the borrower. You can reduce the amount of the monthly payment, or, for example, ask for the so-called credit holiday. You can ask for debt restructuring only in the bank where you've borrowed money.
How to Ask about the Debt Restructuring?
Financial problems are not insured by anyone. If such problems overtook you in the period when you have credit obligations to the bank, you do not need to panic or hide, there is a way out - debt restructuring. For the bank to consider this opportunity, you must notify the bank manager about your financial problems. You can write a letter in a free form, but the main points should be reflected in it:
- date of receipt and amount of the loan;
- since when you've started repaying the loan, how much you managed to repay at the moment, how much you still have to pay;
- when you stopped paying the loan in accordance with the obligations assumed;
- what kind of financial difficulties you have at the moment. On its basis, the bank will decide on exactly how to restructure your debt (offer you a “credit holiday” or extend the loan term by reducing the rate);
- how much you are willing to pay monthly after new conditions are agreed.
You need to write two copies, take them to the bank, register, and wait for an answer.
Debt Restructuring Agreement
The debt restructuring agreement aims to alleviate the borrower's credit burden and at the same time ensure the full payment of the debt, including interest. The agreement lists all the main points regarding debt restructuring. In particular, the selected restructuring scheme:
- "Credit holidays". The borrower pays only the interest on the loan, payments on the principal debt are transferred for a certain period (determined by the bank);
- replacement currency. Not very popular option, which is not surprising if we consider the sharp jumps that can be observed in the foreign exchange market;
- change in interest accrual scheme: equal payments change by a monthly decrease or vice versa;
- interest rate reduction. It becomes possible with the prolongation of the loan agreement. New conditions on the loan come into force upon signing the contract.
By law, restructuring can be used for all types of loans, ranging from consumer, auto loans and ending with mortgage lending. However, it is important to understand that debt restructuring is not always beneficial to the client. Check the debt restructuring alternatives if you doubt that this method doesn't suit you. This is the best way out when there is no loan debt yet. If the restructuring is used by the bank as the last step before a lawsuit to recover the debt from the borrower, you should not rush to agree to the restructuring proposal, since in this case the pennies will be included in the amount of the new debt. The court will approve the amount of the debt, but it will probably oblige the bank to write off the fines.