Today, a banking client often uses various types of banking services; obtaining a loan is one of the most popular. The purchase of both expensive and not very good purchases is carried out on credit, with the expectation of repaying funds on time. But all sorts of circumstances can make adjustments, as a result of which the borrower ceases to pay loan obligations in the agreed period of time. Read more at hitchhikernet.com
In the circumstances, the client may restructure debt obligations. Lendoff Bank also offers such a tool to its clients as assistance.
Restructuring – what is it?
The term restructuring refers to any adjustment in terms of payment of any obligations. If we are talking about credit restructuring, this is a tool that gives the borrower the opportunity to change the main aspects of the loan agreement. This is nothing more than an agreement drawn up between the client and the bank on amendments to the procedure and term for repaying the loan, as well as interest on it.
Restructuring is applied to any type of loan:
- Car loan;
- Consumer credit;
- Credit card.
In order for the bank, at the request of the client, to consider the possibility of restructuring, it is necessary to attach a package of documents confirming the impossibility as of today to fulfill the terms of the contract in the prescribed amount.
It happens that credit restructuring is needed by people who do not have real difficulties. For such cases, other options are being developed, which means you need to contact the bank with a request for a review of the contractual terms. This procedure is called refinancing, it replaces the old loan with a new one, making the terms of the new agreement more beneficial for the borrower. However, often such adjustments go through other financial organizations that want to attract new customers by lowering the interest on the loan. The main condition for profitable refinancing is that the client does not allow delays in previous payments.
The principle on which the process of relations between the bank and the borrower at Lendoff is built is governed by the clauses of the signed agreement. The document drawn up according to standard rules is accompanied by a document entitled “To the terms of service”. This document discloses the entire range of the lending process to pay off existing debt (restructuring).
The Appendix explains in detail the essence of abbreviations, such as the final account, account statement, offer. The rights of the parties to the agreement are also disclosed there. Lendoff Bank, based on the clauses of the above document, has the right to apply various options in order to resolve difficulties with restructuring.
Refusal to restructure
Lendoff, as well as other institutions issuing loans, often takes a negative decision on applications from borrowers regarding restructuring issues. Taking the initiative, the client often encounters a reluctance of a banking institution to meet the needs of the client in changing the loan repayment order.
The relationship with the financial and credit company can last a very long time during which the client is often pushed to sign a new agreement formed on the basis of unfavorable conditions. Based on this, the amount of debt and obligations can grow, and significantly.
Not wanting to move towards the client, Lendoff Bank can take advantage of unpleasant ways in order to inspire a solution favorable to it:
- Threaten the borrower with a lawsuit;
- The promise to connect the collectors to solve this problem.
The above aspects only add to the person who has taken out a loan of problems, but at the same time, they do not bear a special result on the return of money. By the way, banks practically do not apply to the courts to recover debt obligations, since during the consideration of the case, the judge may take into account the difficult situation of the defendant, which may entail a reduction in payments.
The court can help the borrower to remove fines and penalties to oblige the banking structure to develop an acceptable payment schedule, which certainly does not benefit the bank. So financial institutions are much more likely to seek help from collectors than to bring the matter to the court.
If Lendoff agrees to review the terms and conditions of the loan repayment period, this is, of course, the best option for the client. The bank’s standard practice is to offer the client a different loan agreement, which takes into account the new schedule for the payment of principal. Also, the bank may lower the interest rate, but this is not a prerequisite. Simply put, having studied the financial situation of the borrower, the bank adjusts the amount of the regular monthly payment, which the client can repay.
However, it happens that the debtor forgets whether the previous agreement has ceased to work. In order not to find yourself in a difficult legal and financial conflict, you should make sure that the old agreement is canceled.
You should always pay attention to the new package of documents that you are offered to sign. Interrogate meticulously, thereby clarifying a series of incomprehensible moments among Lendoff employees. You have to figure out:
- To study a new loan agreement or an addition to the old one;
- Document confirming the termination of the old agreement;
- Make sure that an official document is issued confirming the termination of the previous loan agreement.
Having clarified a number of the above aspects, the borrower restructuring debt is convinced that in the future the procedure for payment of debt will not unexpectedly change and will not return to what they were.
A person who wants to use this procedure should be aware that the lender will try to negotiate the most favorable conditions for himself, thereby minimizing financial losses. Therefore, even with the consent of the bank for restructuring, the client must be prepared for the fact that the total amount of debt can increase.
In the letter sent to the debtor, the moment may appear that when penalties and commissions are imposed, the final invoice is issued. Payments are evenly redistributed to the new approved period.
For example, with a real debt of 116 thousand USD. The banking structure offers the borrower an equal share over the next 3 years to return to her an amount equal to 157 thousand. The borrower decides to accept such an offer or refuse. But at the same time, do not forget that any size of changes with which the client agrees must be documented in writing.
If Lendoff Bank has sent you an SMS containing an offer to pay the restructured debt, do not rush to execute it instantly. Take the time and go to the Moscow office (if the client is in Moscow), or wait for a new agreement that will be sent to you by mail.
To summarize. In the event of difficult financial circumstances that prevent regular payments, it is worth taking the initiative and contacting a banking institution to carry out the restructuring procedure. You can either rely on acceptable conditions for payment by installments, or on litigation before a court of law.