Many people when they encounter problems with paying off the loan decide to ignore them and hope that “somehow it will be.” This approach can only have negative consequences, such as the intervention of a debt collection company or bailiff. Most people are unaware that the bank is generally willing to negotiate with a financial customer. Both parties can benefit from this, because engaging a debt collector or bailiff is financially unprofitable for anyone. Credit restructuring is one of the better solutions for both temporary and long-term financial problems. So what are its forms?
What to do if we suddenly run out of money in installments?
Not everything can be predicted. Sometimes the loss of a job, a random accident or the death of a loved one suddenly causes the household budget to become empty. There is a good chance that the situation will improve in a few months, but at the moment we simply cannot afford to pay our debts on time. It is in such cases that credit holidays are perfect. It is a form of restructuring involving the bank granting us several months of debt repayment. In return, further installments may increase or the missed installments will be added to the loan repayment period. What is the better solution than just ignoring subsequent bills? Thanks to credit holidays, we can be sure that a bailiff or debt collector will not knock on our door. Ultimately, the cost of credit should be slightly higher, and during these few months we will have time to put our financial order in order without worrying about the unpleasant consequences of defaulting on debt.
Long-term loan restructuring
Credit holidays, however, will not help much if the problem is not temporary and for a long time loan installments will be too big a challenge for us. The solution in this case is to extend the loan repayment period. In this way, we will increase its final cost, but monthly installments should decrease. Thanks to this, we will be able to give our portfolio a little relief every month and protect ourselves from charging high interest for late repayment of installments. If we have several different debts, you can also consider consolidating them into one loan with more favorable parameters.
Credit restructuring is an option for almost everyone. It is worth trying to start a dialogue with the bank instead of running away from communication with it. It may turn out that thanks to this we will save ourselves a lot of nerves and problems.