When concluding an agreement, the bank shall indicate the date by which payment must be made. Sometimes it happens that the borrower does not have time to make payment due to delayed salaries or problems in the business. The extension of the loan, that is, the postponement of the debt payment period, will help solve the problem.
Order
If the borrower knows in advance that he will have problems with paying the loan, then you need to immediately deal with this issue. To issue a prolongation in one day is almost impossible. The first step is to carefully study the loan agreement to understand how the bank relates to changes in the payment schedule. Even if there is no extension clause in the contract, you should contact a specialist in the credit department. Most likely, the bank will agree to a change in the payment schedule. Next, you should write an application for a loan extension in the department, a sample of which is presented below. After the full package of documents has been collected, it remains only to wait for the final decision.
Options
Credit extension is carried out according to one of two schemes. In the first case, the schedule for depositing funds is changed or one payment term is postponed, while the full repayment term of the loan remains the same. The second option is to extend the loan term, that is, transfer the date of full repayment of the debt. Depending on the needs of the borrower, the period may be extended to months or years.
The first option is more beneficial to the bank, but not always appropriate for the client. Not every lender agrees to extend the loan term. The Bank independently chooses a method of changing the terms of lending. Whether or not to agree with them is up to the client. In general, not every borrower can count on a postponement of the debt repayment period. You must have a good reason and provide reasoned facts.
Conversation
Many conditions for obtaining a deferral depend on the results of negotiations of the borrower with the bank. For issuing a loan extension, the lender charges a fee, the amount of which depends on the amount and duration of the loan. Some institutions even increase the interest rate. Changes in the terms of service of the contract may be so disadvantageous that the extension will lose all meaning. Therefore, all the nuances of the transaction should be clarified in advance.
For the entire duration of the contract, the extension can be issued only once. In case of repeated violation of the terms of repayment of the debt, the bank will return the funds in any way, including withholding payments from the salary.
Registration
To complete the extension, you should prepare a standard package of documents:
- passport of the Russian Federation;
- statement;
- work book;
- certificates confirming the amount of income (from the employment service or from the accounting department of the enterprise);
- additional documents in the case.
The statement should indicate the reason for the deterioration in financial condition and the outlook, that is, the actual maturity of the debt. A full package of documents is considered within 10 days from the date of application. If the bank considers the arguments weighty, then the client will need to sign an additional agreement to the contract with new terms and conditions.
Benefits of Rollover
The extension of the loan agreement is beneficial not only to the borrower, but also to the bank. A financial institution is trying to resolve a problem debt problem without going to court.A serious reason for changing the terms of service is considered a serious illness of the borrower, a decrease in salary and other circumstances, as a result of which the financial condition worsened. Most willingly, banks meet customers with a good credit history. It is better not to allow delays in paying the debt, otherwise it will be much more difficult to negotiate with the creditor.
To avoid the accumulation of overdue debts, the client can arrange a debt restructuring. In this case, both parties to the transaction will achieve their goals. The client will decrease the amount of monthly payments, and he will be able to solve his financial problems. The extension of the loan allows the bank to save money that would have been spent on litigation. And maintain a high quality loan portfolio.
The extension of the loan leads to an increase in the maturity of debt and, as a consequence, overpayment. The bank will receive a large amount of funds from the client, but the borrower expects certain advantages:
- repayment of bad debts without going to court;
- maintaining a good credit history.
Alternatives
Prolongation is not always carried out by changing the timing or size of payments. The Bank may take other measures - draw up a refusal (partial or full) to levy a fine, draw up a new repayment schedule, defer payment of the principal loan amount without changing the amount of accrued interest. All of these actions are considered legal.
Conclusion
In the event of a deterioration in financial condition, the borrower may apply for a loan extension. In this case, the structure of payments or the schedule of debt repayment changes. Most often, banks meet customers and restructure debt. It is better to get money from the client, albeit after a longer period of time, than go to court. But the reason for prolonging the loan must be serious and justified. The representative of the credit organization must be sure that the client is telling the truth. Borrowers themselves most often agree to extend the maturity of the debt. Overpayment of interest does not increase significantly, and the credit load decreases.