Are you wondering what is the restructuring of the loan? It is possible to change the terms of the loan agreement. In order to restructure your debt, you should contact the lender and choose one of the opportunities it gives us. We can, for example, extend the loan period or reduce the loan installments. We can create an application for loan restructuring independently or use a ready-made model.
Credit restructuring – what is it?
Credit restructuring is the possibility of changing its terms previously agreed in writing. Restructuring may also apply to installment loans via the Internet . We use debt restructuring in the event of a debt being created on our account or when we want to repay the loan earlier.
Advantages and disadvantages of loan restructuring
Like any solution, the loan restructuring brings both advantages and disadvantages. The advantage is that we change the rules of lending to our financial capabilities. What’s more, by extending, for example, the loan period, we gain time to repay the debt.
The disadvantage of this solution is, however, that not every lender gives this opportunity and not everyone will consider our application positively. The loan restructuring is also connected with additional fees resulting from the new form of lending, which we apply for.
An application for loan restructuring – how to write?
We may only make changes to the contract with the lender in writing. For this purpose, we should write a loan restructuring application and refer it to our creditor. We can write such a conclusion by ourselves. It should contain our request and a description of the current financial situation, i.e. information about the fact that we lost our job. This is very important, because we inform the lender eg about the fact that we will not be able to pay installments in the current amount of PLN 1,000, and much less.
Remember that we can also apply for a loan restructuring when our creditworthiness is improved. This means that if, for example, we have been promoted, we receive a larger salary, we can apply for early repayment of the loan or partial repayment of the debt.
What does the letter of the restructuring of the loan contain?
We can also find the model of the loan restructuring letter online. So we do not have to create its content ourselves. However, it is worth knowing what elements should be included in the sample of the restructuring request. The document should include:
- creditor’s details;
- debtor’s data;
- the details of the case to which the letter refers;
- a well-presented problem with a proposal to solve it;
- an offer for a new loan period or loan installments (if we are applying for a change in conditions as a result of moving towards the debt spiral;
- a description of the current financial situation on the basis of which the bank will review our application;
- confirmation of receiving a fixed income, which is crucial when applying for a loan or loan (although there are also loans without income);
- confirmation of lack of work (certificate of employment) or loss of work capacity (sick leave, discharge from the hospital, sick leave);
Credit holidays as a form of loan restructuring
One of the forms of loan restructuring are credit holidays. It is possible to suspend the loan repayment for a few months. We can opt for an option in which the loan period will automatically be extended and the loan installments will be the same. We can also pay higher installments after the loan holidays, and get rid of the loan on the date previously agreed with the lender on the contract.
We apply for credit holidays with our lender. Whether it will give us the option to suspend the loan repayment depends on the assessment of our creditworthiness.
Refinancing and consolidation of loans
A change in the loan agreement may also apply to refinancing the loan. It is possible to take a new loan from a lender cooperating with the current one in order to be able to repay the current debt. The new loan will be granted to us under new conditions, which will be more beneficial. However, the creditor must assess the credit risk related to the granting of a new financial obligation to us.
There is also the option of consolidating loans, ie merging several smaller ones into one. Its conditions will also be adjusted to our current financial capabilities.
Debt restructuring and Retrodatabase – does it affect scoring?
When deciding to restructure debt, it is worth knowing whether it has any impact on Retrodatabase. Well, the restructuring of the loan does not adversely affect our credit history in the Credit Information Bureau database. Only the change in the terms of the contract will be noted as the fact that we have in time managed the deteriorating financial situation.
Remember that changing the terms of the contract gives us the chance to avoid a spiral of debt, a situation in which we constantly reach for more loans to pay off the previous ones.
Mortgage restructuring and loan period
The basic condition that must be met by the borrower applying for the restructuring of the mortgage is the lack of arrears in repayment of loan installments. If this condition is met, you must submit an application to your lender. You can, for example, request extension of the loan period or reduction of loan installments.
It is important to include your request in writing and to be aware of your current financial situation in order to accurately present it in the document. The lender will analyze our application and take the right decision.
Loan restructuring – is it possible?
Not only by taking a loan we have the chance to change the terms of the loan agreement. The non-bank market offering different types of loans also gives a chance to match them with our current financial possibilities. This means that, for example, reaching for a quick non-bank loan that is an alternative to a private one, we also have a chance to reduce the amount of installments paid.
To make changes to the current contract, please contact our lender and give him our attempt. We can do this by sending an annex to it containing a proposal for changes. We must be aware that the lender may agree to it or reject it.