There are various situations in life. Companies that only yesterday seemed reliable and stable are closing, declaring their own bankruptcy, so it is important to calculate everything down to the smallest detail, especially when it comes to taking out a large loan. What should a person do when unforeseen circumstances occur and he is temporarily unable to pay his debt to a credit institution?! There is always a way out. Let's consider in this article, on the website, the proper behavior when situations arise when there is really nothing to pay the loan with.

One of the solutions that will help the borrower in case of unforeseen circumstances is debt restructuring at the bank with the help of its prolongation.

What's happened loan extension!?

The extension provides for reducing the pressure on the borrower from the bank by reducing the size of the monthly payment. Loan extension Most often it involves extending the loan term, due to which the amount of monthly payments becomes slightly smaller. If the borrower has regularly paid his debt over a certain period of time, the bank may make a concession to him. There is such a type of loan extension as suspension of payments. You may be given a certain period of time during which you will not need to repay the loan and you can safely find a new job or another source of income, and no fine will be charged. But when you resume repaying the loan, the monthly payment amount will become slightly higher in order to meet the debt repayment deadlines stipulated in the loan agreement.

Second option prolongation The loan provides for an extension of the debt repayment period, which is provided for in the loan agreement. At this point, it’s up to you to decide which option is most convenient, because when you extend the term, the amount of interest that you will overpay to the bank for using credit funds will increase.

How can a borrower get a loan extension?

Pay attention to your loan agreement. The terms of the contract must contain information about the possibility or impossibility of obtaining a loan extension. If the terms of the agreement do not provide for an extension, contact the bank branch and ask about the possibility of obtaining an extension, and whether, under the terms of your loan agreement, it is possible to extend the debt repayment period. Most often, banks do not indicate information about loan extension in the loan agreement, but its provision is provided for by bank policy. Please note that credit institutions do not provide debt extension services to all borrowers.

Only borrowers who have regularly paid the loan and encountered an unexpected serious problem can count on being granted an extension. The borrower has a significantly increased chance of obtaining a loan extension if he has opened a deposit account with the bank or has been a bona fide client of the bank for a long time. If you took out a loan from a bank secured by property and you just need to change the date of the monthly payment, and not reduce its amount, then you should contact the bank and its employees will immediately make concessions.

Is prolongation beneficial for financial institutions?
If you suspect that a credit institution will most likely refuse to extend your loan, it is important to explain that this will benefit not only you, but them too. Firstly, issuing a new loan will cost the bank much more than prolonging an existing one. Secondly, it is important for the bank to maintain the level of its loan portfolio and, if the bank refuses, then it will need to look for a new client for a certain amount of funds. Thirdly, the bank will receive more profit by prolonging your loan, because the cost of the loan will increase as the loan term increases. If you say the above in three words, then the borrower, asking the bank to extend the loan, is offering to earn additional funds on it. In addition, in a situation where a credit institution refuses to extend a debt, the borrower may be late in payment, which is extremely unfavorable for both parties. Tell all this to the bank employees and, for sure, they will make concessions to you.

When concluding a loan agreement, the bank must indicate the date by which the obligatory monthly payment must be made. It happens that the borrower does not have time to pay off the debt before the date specified in the document. Most often, the reason for this is a change in the date of receipt of wages, problems in business, etc. This problem has a solution - prolongation, which is a change in the loan repayment schedule.

Procedure

Having learned that it will not be possible to make a mandatory loan payment before the due date, you need to immediately address this issue. You cannot delay this, since it is almost never possible to extend a loan in one day.

When there is plenty of time left, you should carefully study the loan agreement and understand how the creditor bank views changes in the lending schedule. If this option is possible, then, most likely, information about this will be displayed in the documents. If the contract contains a clause on prolongation, then there should be no problems with its implementation.

When there is no mention of prolongation in the entire agreement, you can find out about the possibility of prolongation from a specialist in the credit department. There is a high probability that the bank will agree to change the loan payment schedule.

Loan extension: options

If prolongation is possible, the borrower will have to think about the type of prolongation, since there are two options for carrying it out.

The first option only involves changing the payment schedule for mandatory payments. In this case, the deadline for the final payment of the loan remains the same as it was at the time of conclusion of the agreement. The second option is to carry out a prolongation for a period that exceeds the period established by the bank when signing the agreement.

The first option is a more profitable solution for both parties to the transaction, but it cannot always satisfy the needs of the borrower. Today, not all lenders agree to the second option with extending the loan term.

Contacting the bank

Having learned about the possibility of prolongation and having chosen the option for its implementation, you can go to the branch of the creditor bank. Here you will need to write an application requesting an extension. Not everyone can count on changing the loan repayment schedule. The financial institution will agree to this only if the request is justified by objective, compelling reasons.

When prolonging a loan, many banks charge the borrower a commission, the amount of which directly depends on the term of the loan extension, as well as on its amount. Some lenders may increase the interest rate when prolonging. You should be aware of any such changes in advance.

In some cases, the changes can be very serious, making the extension unprofitable, which is why borrowers refuse to carry it out and look for other ways out of the difficult situation. In some cases, it may be issued with a reduction in the commission, and sometimes even the complete elimination of the commission. Many extension conditions will depend on negotiations between the loan officer and the borrower.

The borrower needs to be prepared for the fact that the lender may require any additional documents to carry out the extension. Having drawn up an application and collected all the necessary documents, the borrower can only wait. His application will be submitted to the credit committee for consideration. If the application is approved, the extension will be carried out.

Many borrowers, when applying for one or another type of loan from a bank, rarely think about the fact that they may have a situation related to the impossibility of fulfilling their loan obligations. And it’s not at all a matter of the debtor’s irresponsibility. Problems that may arise during the period of debt repayment are often completely independent of the person.

Factors such as, for example, loss of main job, severe illness, injury, etc. can lead to a person being insolvent for a long time. However, debt is debt, and the problem with the bank will still have to be solved somehow. Therefore, the most logical solution to solve this problem may be to extend the loan. Read on to learn how to do this correctly.

Bank loan extension

Nowadays, many financial and credit institutions very often meet their debtors halfway and offer them a deferment on loan repayments or an extension of loan terms.

Here it is very important for the borrower to take into account one nuance: if a situation arises in life that does not allow fulfilling obligations under the loan agreement, you should not hide from the bank and hope that the problem will resolve on its own. On the contrary, the longer the debtor hides from the creditor, the worse it will be for him in the end. Thus, the sooner the debtor reacts and quickly comes to the creditor to confess, the sooner a mutually beneficial compromise will be found.

Extension, or as people say, loan extension, the process is quite simple. And if we talk about some kind of universal scheme for extending credit, then in principle there is none. Each bank individually considers the debtor's situation and after that offers its own conditions for solving the problem. This takes into account not only the debtor’s problem, but also his financial situation, solvency, debt amounts, type of loan and its reliability in general.

What to do?

Therefore, when a person has a problem repaying a loan, he first needs to contact his bank with an application (in writing) to extend the loan. Here you will need to indicate the reasons that led to the impossibility of paying off the loan debt and attach all the documents that can confirm this fact. That is, if, for example, the debtor had an accident and ended up in the hospital, he will need to submit to the bank documents from the traffic police and the hospital confirming the fact of the accident and the debtor’s stay in the clinic for treatment.

Here it is very important to prove the objectivity of the reasons that resulted in the debtor’s inability to timely cope with the obligations assigned to him. And as soon as the bank is convinced of this, it will definitely make concessions and reconsider the terms of the agreement.

It should be noted that almost every modern bank gives its client the opportunity to extend the loan. Moreover, it is completely unprofitable for the banks themselves to drive their debtors into a dead end and bring the matter to court, since this takes a lot of time and threatens with loss of income if the court finds the debtor innocent.

As soon as the bank makes the appropriate decision on the extension, the borrower will have the opportunity to increase the initial loan terms, which, in turn, will reduce monthly loan payments, or even provide a deferment in debt payment.

Disadvantages of loan extension

The only drawback of prolongation is that the borrower will definitely not be able to avoid overpayments on the loan. After all, with an increase in the loan period when extending the loan, the borrower at first will only pay interest on the loan, and not the main body of the loan. Simply put, The longer the loan term, the more interest the debtor will have to pay. In this case, the deferment may concern only the main body of the loan.

If the bank provides the possibility of prolongation, then the debtor will have to prepare for the fact that he will have to pay interest to the creditor every month, or, if the bank makes such a decision, the main body of the debt. In this case, no delays should be allowed.

Credit holidays

Of course, there are often cases when creditors provide their debtors with a more loyal solution - credit holidays, during which the debtor does not pay either interest or principal on the loan. Credit holidays can last up to six months, which is quite enough for the debtor to be able to improve his financial situation and begin to regularly pay off his debt. All the money that he owes to the bank will simply be evenly distributed among future payments.

Signing a new agreement

When deciding to extend the loan, the borrower will need to sign an additional extension agreement at the credit institution, which will be attached to the main agreement. The new additional agreement will already spell out new conditions and terms of the loan, as well as the deadline for the final repayment of the loan payment and other similar points.

A borrower who finds himself in debt to the bank should not let down his guard when signing a new agreement. The fact is that many banks, in order to reduce their own risks, require the debtor to provide additional guarantees for the repayment of the debt, for example, to provide some kind of security: property as collateral or to present a reliable guarantor. And this is not a whim of the bank, but the realization that since the borrower has already found himself in a difficult financial situation once, it means that there is always a possibility that a similar situation could happen again. And in order to once again insure themselves and reduce possible risks, banks are simply forced to agree to such conditions.

If you still have any gaps in understanding your rights and obligations in the event of extending a bank loan, then you can ask our lawyer your question online. The form for this is at the bottom of the page.

Many of us take out large loans to solve pressing issues. With the help of borrowed funds, we make necessary purchases and make urgent payments. A loan helps you get out of difficult situations, but the time comes to repay your debts. There are many unforeseen situations in life, and we cannot foresee all of them, so it happens that there is no way to pay off debts on time. However, if the borrower is conscientious and treats his obligations responsibly, it is in the interests of the bank to make him an indulgence. And the lender may well agree to extend the loan.

What is a loan extension?

The word prolongation comes from the English "long". Accordingly, its meaning can be defined as an extension, and in relation to lending this will imply an extension of the loan period. If financial problems arise for a conscientious debtor, the bank will certainly agree to an amicable solution, and, after its own assessment of the situation, may extend the loan. However, lenders make such concessions when the amount of borrowed funds is large, most often when applying for a mortgage. Often the opportunity to extend the payment period is stipulated directly in the loan agreement. In addition, in order for the lender to extend your debt, you need to prove yourself from the best side. in such cases, the opinion of the lender as a whole will be more important than the purity of your loan. The reasons for carrying out such a procedure must be compelling - it will be much easier to agree on an extension if low solvency is documented.

How to roll over your debt?

The loan extension is carried out taking into account the client’s individual situation: it is taken into account how difficult his financial situation actually is. Perhaps the person acted irresponsibly and did not think about the consequences of paying the debt. In order to extend the loan repayment period, you will need to contact the bank branch with a corresponding application and attach an identification document, as well as a certificate of income. Such an application will be considered within several days, after which, if the answer is positive, an additional agreement will be concluded with you, which will indicate new conditions for paying off the debt. For those borrowers who are approaching retirement age, the lender may set age restrictions at the time of full payment of the debt. In addition, it is important to remember that you can apply for an extension of the loan repayment period only once during the term of the loan agreement.

Today there are a large number of credit options that help the borrower pay off debt in difficult times. The same applies to loan extension. Simply put, this is an upward change in the terms originally specified in the contract.

What is a loan agreement extension?

The term “extension” refers to the procedure for changing the deadline for the return of money by the client. Those. If necessary, the borrower may have the loan repayment period extended. This will allow you to avoid delays, deterioration of your credit history and other negative consequences of a lack of funds to fulfill your debt obligations.

Loan extension and its types

Loan extension directly depends on the following criteria:

• the amount of salary the client receives monthly;
• stability of debt repayment;
• the presence or absence of additional income;
• financial reputation of the debtor;
• reasons for extending payments, etc.

Depending on the situation and factors, experts define two types of extension. The first shifts the internal deadlines for payment of funds, the second postpones the date and amount of the last payment for some time. For example, you signed, indicating 12 payments in installments. The latter should be in the amount of 10,000 rubles on June 12, 2018. The remaining payments are made on the 12th of each month in the amount of 8,000 rubles.

In the case of the first extension, the amount of the standing payment and the terms will be changed, but the last one must take place exactly on June 12, 2018 in the amount of ten thousand rubles. In the case of the second option, you can change all dates and amounts, including the last one - June 12, 2018.

How to apply for an extension

An application for loan extension is signed by the financial institution that issued the loan. To do this you need to have with you:

• passport;
• a document that allows you to request a change in the payment period (certificate from the hospital, place of work, etc.).

It is worth noting that sometimes a package of documents may consist of several certificates: about income, about the amount of wages, about additional earnings, from the employment fund, and a work book. A sample application is provided by bank employees. They are also required to provide detailed information about the procedure, possible changes, etc.

An increase in the loan repayment period is only available if you have good reasons for this, supported by documents. This may include job loss, salary reduction, illness, etc. Much also depends on what kind of loan you received, as well as your intentions. Those. if the bank sees that you were repaying the loan regularly before the problems with fulfilling your obligations, most likely the request for extension will be granted.

In other words, holders of a good CI have a greater chance of getting a deferment. Typically, an extension of the contract term is issued when a large loan has been taken out. Sometimes the possibility of delay and its conditions are discussed during the conclusion of the transaction. As a rule, with an approving verdict, the client and the lender additionally sign an agreement, which reflects the new conditions for repaying the loan.