Unfortunately, the financial situation is not always stable, and having a loan today, tomorrow you may encounter serious difficulties. In order for the borrower not to declare bankruptcy, banking organizations most often make concessions and restructure the loan.
What is credit restructuring, how can it help? This will be discussed in this article.
The concept
Credit restructuring is understood as a change in some paragraphs of the loan agreement in a positive direction for the debtor. That is, if the borrower is in a difficult financial situation, then the bank makes concessions to him, changing the interest rates on the loan or the maturity of the debt.
Revision of repayment by maturity is possible only if the borrower submits an official application to the bank with documentary evidence of the problems encountered. This may be a delay in wages, health problems, disability.
The main types of credit restructuring
There are several schemes for restructuring a loan:
- Within six months, only interest can be repaid, with the main debt frozen. After six months, the borrower will have to pay the principal again, together with interest.
- The bank may offer stabilization methods for repaying debt.
- The bank can offer differentiated methods of repaying a cash loan, that is, with each subsequent month the amount of the principal payments will be less than in the previous month.
- For those who issued a loan in foreign currency, restructuring in rubles can be carried out.
- At the discretion of the bank, monthly payments for up to one year may be reduced. After that, the debtor will have to pay the remaining outstanding amount, otherwise interest may be accrued on it.
- At the request of the borrower, the loan term may be increased, but its amount will increase.
- In rare cases (most often under state programs), interest rates are reduced.
Depending on the financial situation of the borrower, a loan is restructured. Banks independently choose in what form it is better to carry it out.
Who can expect a debt review
Customers who previously had no negative credit history and who regularly repaid monthly payments, but who, through no fault of their own, found themselves in a difficult situation, can count on concessions from the bank. Those borrowers who have a negative history of loan payments are unlikely to expect a revision of the loan agreement.
If the borrower does not have any special problems with incomes, and he just decided to release a certain amount of money for his own purposes, then the bank will definitely refuse in this situation. Do not try to outwit credit organizations, otherwise the situation for the debtor may turn into a bad side.
Thus, banks are very attentive to the financial reputation of their customers. For example, credit restructuring in Sberbank is possible in 90% of cases with troubled debtors, but many documents will have to be collected in order to achieve it.
When restructuring is needed
In most cases, customers turn to review payment terms or interest rates too late: when there is already a large debt on the main loan, plus interest and penalties for late payments. If the borrower approached the bank as problems arose, the amount of debt could be reduced.
Therefore, the main rule for those who apply for a loan should be a timely appeal to the bank as soon as financial difficulties arise. For example, a loan restructuring at VTB Bank is carried out at the request of the borrower and is considered within two to five business days.
As a rule, when concluding a loan agreement, banks put forward a condition - compulsory insurance. If, under the terms of the insurance policy, the borrower can not repay payments, and the insurance company will do this, then you can refuse to restructure the loan.
How to achieve credit restructuring
So, as soon as the borrower has problems and increases the likelihood of late payments, or even the threat of default on the established schedule, he needs to contact the bank manager with a statement. And the sooner he does this, the better it will be for both sides.
A loan restructuring application must be submitted together with documents that will confirm the need for this procedure. Upon dismissal, this may be a certificate from the employment center or a work book, in case of illness - a certificate from a medical institution.
In addition to the application, you will need to fill out a special form.
After the bank decides in favor of the debtor, a loan restructuring option suitable for the borrower will be jointly found.
Good Bank
If the borrower appealed to the bank, which can “forgive” fines and penalties for non-repayment of loan payments, and a loan restructuring will be carried out, he was very lucky.
Usually in such situations, the bank proposes the conclusion of a new contract and, of course, with other conditions. The only thing a borrower must make sure is that the old loan agreement has ceased to exist. Otherwise, he will have to pay for two loans. And it is best when requesting a new loan to request a certificate confirming the absence of any debts to a banking organization.
Restructuring of foreign currency loans is most often carried out by credit organizations, because it is more profitable for them to convert everything into a ruble loan and not depend on changes in exchange rates. Recently, it has gained great relevance.
Bad Bank
Banks do not always go for a revision of a loan agreement, and there can be no talk of any “forgiveness” of debt. Sometimes it’s easier for them to connect collection agencies to work with problem clients, or go to court. But this is in the worst case.
Most often, banks that do not compromise, offer to conclude an insolvent client a new loan agreement. In it, the creditor indicates the amount of the principal debt, as well as the accrued fines and penalties. As a rule, such contracts are concluded for a longer period, but with a lower monthly amount of mandatory payments.
It is clear that such conditions are not beneficial to borrowers who already find themselves in a difficult financial situation, but it will be possible to challenge the decision of the bank only in court.
Advice to borrowers
If you don’t take any actions, but simply don’t pay the required monthly loan payments, then after a while you will receive a reminder of the debt via SMS, then there will be calls from the bank managers, after some time collection agencies will start to bother, and later will come subpoena.
To prevent this from happening, you need to take adequate measures in time so that you are not declared bankrupt. After all, the banks themselves are not profitable to have overdue loans on the balance sheet. Over time, the bank itself will offer to review the terms of the contract. For example, restructuring a loan at Sberbank is rarely carried out at the request of customers. The bank often makes concessions in order to soon turn to it for new loans, and also recommend this organization as reliable and able to help even in difficult financial situations.
