Credit Restructuring - What Is It In Simple Words? Golden rules for credit restructuring.
The economic crisis is slowly but surely coming into our lives from TV screens and Internet news headlines. Prices are rising, salaries are falling, staffs are being reduced - and bank borrowers, who were optimistic about their lives yesterday, are not able to pay loans on the same terms. Desperate people start taking new loans at crazy interest rates, hiding from banks, exacerbating their already unenviable position. What to do? The most understandable, legal and civilized way to reduce the debt burden is to agree with the bank on credit restructuring. What it is? How is the restructuring? How to write a loan debt restructuring statement, sample?
Despite the complex name, this procedure, upon closer examination, becomes accessible and understandable for a wide range of borrowers who find themselves in a difficult situation.
What is credit debt restructuring?
Loan restructuring is a change by the bank at the request of the borrower of the terms of the loan agreement, which allows to reduce the debt burden on the borrower in difficult life circumstances (dismissal from work, loss of income, prolonged illness, etc.). As a rule, restructuring is beneficial for both parties to the loan agreement - the bank avoids the formation of overdue debts and the creation of additional reserves for it, and it is easier to fulfill the requirements of the Central Bank on mandatory ratios. The borrower, on the other hand, has the opportunity to take a breath, gather his strength and repay the loan with "little blood." In addition, restructuring does not worsen credit history. Almost all banks use this tool - the purpose of the bank is not to let you go around the world, or then to realize the deposit accepted on the balance with blood, but to get the money due to pay back with interest. And if the bank sees an opportunity to restructure the loan debt - he will use it.
What loans can be restructured? What are the restructuring options?
So, you wondered - how to restructure loan debt? First of all, you need to have confirmation that you really need a restructuring. The bank needs documentary evidence that you have difficulty repaying your debts - a certificate of work to reduce, reduce income, a medical card, a certificate from a medical institution, etc. Secondly, it is highly desirable that at the time you contact the bank you do not allow serious delays in the payment of principal and interest. Thirdly, the restructuring should not have been executed on the loan earlier. The list of conditions may change in some banks up or down.
It is worth remembering - the bank can, but is not required to restructure your loan. If he doubts your good faith or the prospects for financial stability, the loan will most likely not be restructured. And the ball is always on his side. Therefore, the answer to the question - “How to achieve restructuring of debt on a loan?” - quite trivial: behave honestly and responsibly. Contact the bank before the delay occurs, state your difficulties openly, express your readiness to pay off your obligations in good faith - and they will meet you.
How to restructure loan debt with maximum benefit for yourself? Banks can offer you (usually a choice) several alternatives: increasing the loan term, “credit vacation”, an individual debt repayment schedule, changing the loan currency, lowering the interest rate on the loan.
Restructuring Procedure
How is loan debt restructuring? First of all, you must take the first step - to come to the bank and declare your intention to reissue the loan on new conditions. You must write a statement on the restructuring of the loan debt, the sample will most likely be presented to you by the loan officer. Sberbank and a number of other large banks do not need to write an application of any form - you will be issued with a special form to fill out. It must specify the reasons for the deterioration of the financial condition, the list of available loans, information about the property, financial flows, the preferred restructuring scheme for the borrower.
If you have any difficulties filling out an application with the bank, write a statement on the restructuring of the loan debt, the sample is presented below.
In "Bank Name, Address"
from "Name, Index, Address",
Statement
“Date” between “Name” and “Bank” A loan agreement No. __ dated “Date” was concluded on the following conditions: loan amount __ rubles, for a period of __ (date of the final loan repayment “Date”) loan interest rate __% per annum, target use - on _______.
Pursuant to clause __ of the Loan Agreement, a change in the size of the interest rate and the term for payment of the loan by the Bank is envisaged, both unilaterally out of court and by agreement of the parties.
Since "Date", my financial situation has worsened due to .... (loss of work, reduction of wages or decrease in total income, natural disasters, force majeure, illness, etc.), which is confirmed by the following: (indicate documents proving the reason: income certificate, proof of unemployment status, etc.) .
Throughout the entire term of the Loan Agreement No. __ dated Date, I paid all payments to the Bank in a timely manner: principal, interest, commissions, as of the date of this appeal, there are no overdue debts.
Based on the foregoing, I ask you to restructure the debt under the loan agreement No. __ from "Date", namely:
1. reduce the interest rate to _______ per annum;
2. roll over the amount of the principal debt for the term __, changing the term for the final repayment of the loan from “Date” to “Date”.
Appendix: 1. A copy of the evidence confirming the deterioration of the financial situation - on __ sheets.
Name, date, signature.
The application / questionnaire is submitted for consideration to the bank's problem debt service. If all the formal requirements of the bank for the possibility of restructuring the loan are met, the borrower will agree on the possible parameters of the restructuring, and he will be sent a list of documents necessary for considering the matter by the credit committee. After the borrower has collected all the necessary documents and if the credit committee makes a positive decision on the restructuring, an agreement is signed between the bank and the borrower on the new terms of the loan agreement.
How to make loan debt restructuring without extra time and nerves? Contact the bank immediately after the fact that your financial condition worsened. Do not overdue obligatory payments. Do not dig a financial hole for yourself - do not take new debts in order to pay off old ones, refinance at another bank, and even more so at a microfinance organization, as a rule, much more expensive and troublesome. Remember - a favorable resolution of your financial problems is beneficial to both you and the bank.
Konstantin Yelsky
When it is not possible to fully pay a loan, debt restructuring may be one of the solutions to the problem. So, you can avoid the accrual of penalties for late payments, communication with collectors, litigation with creditors. The main thing is not to hide from responsibility, but to make contact with the bank, highlighting your difficulties, because the law is on the side of the borrower. The restructuring program is legislatively fixed by the RF BC Art. 105.
What is debt restructuring and what is it?
So, what is a citizen's debt restructuring? The procedure involves changing the conditions in the contract between the borrower and the lender. The restructuring methods are as follows:
The method of restructuring in the bank | Features |
Loan extension | The loan term increases, monthly payments are proportionally reduced. If there are fines, they are also broken down on a monthly basis. It is possible in this case, an increase in interest rates. |
“Credit holidays” | It implies a deferral of payments for a period previously agreed with the bank, for example, 1-24 months. During the "vacation" the borrower pays only interest on the loan. So, the overpayment for the debtor is increasing. The method can be called the most expensive for the debtor, but sometimes it is the only way to pay off the debt to the bank. |
Interest rate reduction | Bankers very rarely go for this type of restructuring. As an exception, they may allow a decrease in the period when the Central Bank of the Russian Federation refinancing rate is reduced, and only for borrowers who have delayed for the first time. As a rule, these are “mortgage” clients. |
Change currency | The program is relevant during the devaluation period. It is extremely unprofitable for banks to replace the loan currency, therefore this decision can be made as a result of political pressure on the leadership of a banking organization, formed under the influence of external factors. |
Write-off of the penalty | The option is possible, both partially and completely. To do this, you need to present to the creditor strong arguments for your innocence of delay, for example, a sick leave or a decision to declare a citizen bankrupt. |
Combined program | In some cases, a bank may apply several restructuring methods simultaneously. For example, extend the loan term and write off part of the penalty. This approach is not standard, and is used individually. |
Debt restructuring is not a panacea for problems with credit obligations. It is designed only to facilitate the payment of debt on a loan. And far from all borrowers, the bank provides an opportunity to "rehabilitate themselves." Much depends on a person’s credit history, the presence of strong evidence of his insolvency, his desire to cooperate with the bank and fulfill his obligations.
The debt restructuring service was widely used in Russia during the well-known crisis of 2008 and today the procedure is no less relevant for many. So, it is recommended to seek help in advance, without waiting for the arrears and accrual of penalties. Then the chances of the bank's consent to implement the procedure increase significantly. However, there are cases when changes to the contract occur several months after the delay occurs, it is often appointed by the court.
In most cases, an agreement between a creditor and a client on debt restructuring is concluded when the following circumstances arise:
- The borrower has sharply decreased income.
- The employee lost his job (downsizing, liquidation of the enterprise).
- Entrepreneur lost business.
- The client has a serious illness requiring large expenses, etc.
- In the debtor's family, the main breadwinner died or a new member was born - a child.
Initially, the borrower should offer its possible ways out of the situation, and after that the bank will decide how to do the debt restructuring based on the available facts. In addition to verbal explanations, the bank needs documentary evidence of the difficulties the citizen has developed. For example, a sick leave certificate, a certificate from the place of work, where a real drop in salary is indicated, a copy of the work book with a mark of dismissal, etc.
You should apply for the service when you are under 70 years old. Those who have not previously resorted to restructuring, as well as who have a good credit history, are more likely to approve the request.
How is debt restructuring?
The debt restructuring procedure has a certain sequence. Consider the borrower's action plan in more detail:
- Contact your lender by visiting his nearest branch.
- While verbally voicing the problem. If the bank says that such services are not provided, request a written refusal.
- After, write a restructuring application.
- In case of agreement, agree on a scheme suitable for both parties to amend the terms of the loan agreement (according to the standard or individually).
- Gather the necessary documents for the procedure justifying your current financial situation.
- Conclude an additional debt restructuring agreement with the lender.
How to draw up a debt restructuring application?
Writing an application for debt restructuring is one of the mandatory points in the implementation of the procedure. In fact, this document is an analog form of the questionnaire, moreover, filled out not in a strictly regulated, but in an arbitrary form. Here are indicated:
- Information about the borrower and his documents.
- Data from the loan agreement.
- Reasons for material difficulties (supporting documents are attached).
- Description of the prospects for improving the situation in the future.
- The method of easing credit circumstances chosen by the borrower.
Benefits from restructuring
So, what does debt restructuring mean, we hope you understand, but a related question arises, but how beneficial is it for the debtor? In this case, there are two opposite sides, namely:
- Restructuring allows you to reduce the loan burden, reduce the size of monthly payments, change the currency of the loan in order to avoid the negative effects of devaluation, delay the loan repayment period.
- The total overpayment on the loan will increase if the borrower repays with smaller payments for a longer period, and if the loan is transferred to another currency, then most likely the interest rate will become higher.
How to do the right thing is up to you. We emphasize only that resorting to the debt restructuring procedure is only in the extreme case when there really is nothing to pay a loan. Improve your financial literacy and learn to build the right mutually beneficial relationships with banks.
Financial problems and difficulties arising in the process of repaying a loan may cause the borrower to default. As a result, litigation, a forced debt collection process, or a bankruptcy process voluntarily initiated by the debtor himself. According to the draft law on bankruptcy, the court is obliged to appoint a restructuring of the loan to the troubled borrower. Bankers themselves also resort to restructuring if they do not want to bring the matter to court. Is restructuring a profitable solution and an effective way to get rid of financial problems? Let's try to understand these issues.
What is the restructuring of a bank loan
The restructuring of the loan is to change the terms of the loan agreement in order to reduce the burden on the borrower and reduce the amount of the monthly payment. Unlike refinancing, restructuring can only be performed in the bank that provided the loan. If during refinancing there are delinquencies, unpaid forfeit, etc. are reasons to refuse on-lending, then during restructuring the presence of debt, on the contrary, is often the main reason for amending the loan agreement. Sometimes financial institutions even promise to “annul” the accrued penalties in order to help the client “return to the schedule”.
Debt restructuring is a good opportunity to avoid problems that inevitably arise for the borrower in case of deterioration of financial condition (in case of job loss, reduction in income, etc.). By changing the terms of the loan agreement so that the monthly planned payment of the borrower is reduced, the bank has several goals. Firstly, he cares about the quality of his loan portfolio (preventing an increase in the share of overdue debts), and secondly, he gets the opportunity not to go to court and not spend money on preparing a lawsuit.
The benefits of restructuring to the borrower are more substantial. A client whose loan agreement the bank agrees to amend may:
- maintain your positive credit history (with a short delay);
- to prevent the commencement of litigation with the bank (which subsequently will become an “indelible dark spot” on the credit file);
- save your money (not all borrowers get these benefits);
- avoid default, as the bank minimizes the monthly scheduled payment and provides an opportunity to repay the loan according to the new schedule;
- get the opportunity to get rid of unpaid forfeit;
- to avoid the forced collection of debt in the course of enforcement proceedings.
We will tell in more detail how restructuring can be carried out.
The main types of credit restructuring
With a timely appeal to the bank (before the financial institution files a lawsuit against the early recovery of the entire amount of debt), the borrower can count on the following restructuring options:
- Loan extension (increase in the term of the contract, as a result of which the planned monthly payment is reduced, but the amount of the overpayment on the loan increases). For example, if the amount of your debt was initially 200,000 rubles, the term was 24 months, and the rate was 30% per annum, then you would have to pay 11,182.56 rubles a month, the amount of the overpayment would be 68,381.54 rubles. Suppose that after 6 months, the borrower failed to repay and applied to the bank for a 12-month extension. Then his payment will be reduced to 7,668.65 rubles, but the total amount of the overpayment will increase to almost 92,600 rubles (more than 24,000 rubles). Personal calculations can be performed in the loan calculator.
- Change in lending currency. For example, due to the growth of the dollar exchange rate, it became difficult for many borrowers to repay loans issued in US currency. Transferring a loan into rubles at a rate that corresponds to the current lending program can be beneficial to the client. However, this is not a popular restructuring option.
- Credit Holidays (only to the "body" of the loan, only for interest or vacations, implying the debtor is temporarily rid of any payments on the loan). That is, the borrower within 3-12 months can pay only the "body" of the loan (the most profitable option that allows you to reduce the overpayment on the loan) or only interest (on the contrary, the least profitable case - interest is charged on a fixed, non-decreasing amount). A rare case is the provision of the right for 3-6 months not to pay a loan at all. For a better understanding of the issue, we recommend that you familiarize yourself with the basic methods of calculating loans.
- Credit Card Transfer Credit (not often used, profitable due to the fact that the rate on consumer loans in cash is usually lower than on card loans).
- Write-off of the penalty.
- Loan rate reduction. Refers to refinancing programs, as a rule, is carried out only subject to an ideal credit history.
- Combined Option. For example, prolongation is often combined with a change in the loan currency.
If the borrowers had a delay in the "body" of the loan or in interest, the lender offers to either pay off the debt or capitalize it. Note that restructuring with capitalization is always disadvantageous: due to overdue interest, the balance on the “body” of the loan increases. For example, the outstanding balance is 100,000 rubles, the delay is 5,000 rubles, including 3,000 for the “body” of the loan, 2,000 for interest. With capitalization, the amount of the “body” of the loan will increase and amount to 102,000 rubles (since 3,000 rubles of debt on the “body” were already included in 100,000 rubles, and 2,000 rubles in interest were added to them).
It is quite obvious that restructuring can be considered the best option for solving financial problems only if it is impossible for the borrower to service the debt on the same terms for valid reasons.
In order to carry out restructuring, the borrower must submit an application and a number of documents to the bank. Their list and the procedure for considering the application will be described below.
How to carry out restructuring: requirements of banks and the procedure for registration
Usually, to carry out a restructuring (regardless of whether you yourself contacted the bank for this purpose, or the loan manager contacted you and suggested changing the terms of the contract), the following documents are required:
- general passport;
- application form;
- employment record (with a note of dismissal, if you lost your job from the time of the loan);
- a certificate from the place of work in the form of 2-personal income tax for 6 (12) months (from the place of your former work, if you are fired);
- a certificate from the employment service authorities on registration (indicating the amount of the allowance paid);
- the agreement of the spouse to amend the terms of the contract (for mortgage lending).
The main condition for borrowers applying for restructuring is the bank’s confidence that the debtor really needs help and that changing the contract will help him “enter the schedule”. Otherwise, financiers only risk wasting time (in spite of the fact that they most often receive additional profit in the form of increased interest when prolonging a loan or taking a vacation on the loan “body”).
For example, Sberbank agrees to consider applications from borrowers only if their financial condition worsens as a result of:
- decrease in income as a result of dismissal or changes in the level of remuneration;
- loss of an additional source of income;
- the onset of parental leave;
- draft in the army;
- serious illness, disability, death (in this case, debt is subject to restructuring, which the heirs will have to pay).
In addition to the standard conditions for restructuring, Sberbank may propose changing the procedure for repaying a loan within the grace period (for certain types of loans) or changing the order of repayment of a debt (usually interest is charged first, then interest and then payments by “body”).
The advantage of restructuring is that it is most often performed free of charge: only with mortgage loans can a borrower incur associated costs associated with the need to sign an additional agreement to a notarized pledge agreement. A significant drawback of the restructuring is the increase in the overpayment of the loan (with the exception of the use of 2 options: the conversion of a foreign currency loan into a ruble loan and the provision of vacations “at interest).
Thus, if your financial situation worsened, and you made several delays in payments, you must urgently contact the bank and ask to restructure your loan. This will avoid serious troubles and get out of a difficult situation with minimal losses. The bank may refuse to carry out the restructuring, in this case, ask for a copy of your application with a note on the registration of the “incoming” and a written refusal: these documents may come in handy in court. Requirements of financiers can be partially or completely rejected by a judge if it turns out that you asked for help that you were denied.
Hello, friends!
If you are a “happy” owner of a loan, I sincerely wish you to pay it back as soon as possible and never have a delay in repayment. But what to do if it is formed or the personal financial collapse is likely to occur? One possible way is credit restructuring.
What is it, how and for whom do they spend it? These are the main questions that I will try to answer in my article.
The answer to the question is unequivocal. Nothing good. Do not fall for the numerous tips of “Internet experts” on tricking banks and the state. The schemes they proposed may lead you to a completely different place where you plan. In my article I talk about this in detail. Pay attention to the way out of a difficult life situation. Restructuring is one of them.
The concept of restructuring
What is credit restructuring? Ideally, these are measures that should ease the debt burden of a borrower in a difficult financial situation. These measures are developed by the bank taking into account the analysis of your current solvency and your own policies.
Below we will consider the main types of restructuring. But first you need to remember one more similar in sound, but not in meaning, the word -. They should never be confused. What is the difference between these two concepts? It's time to remember or find out.
Restructuring is carried out in the same bank where you received the loan.
Refinancing may be arranged in another. In it you conclude a completely new loan agreement, which should have more favorable credit conditions. The new bank repays your old debt or debts, because you can refinance several loans at once. And you begin to repay now the only loan to your new bank.
Restructuring does not imply a new contract. The conditions of the old are changing, that is, you remain the debtor of your bank, but on other conditions. The bank agrees to meet you and facilitate the repayment of debt on the loan. Is it really? Not everything is as rosy as borrowers would like. I will also tell you about this and show on the numbers.
There is another significant difference. Refinancing is almost impossible to do if there are overdue loans. Banks have stringent requirements on this issue. And for restructuring, delinquencies are allowed and often become the reason when the bank itself turns to you with a proposal to conduct this procedure.
It is worth saying that the client himself can be the initiators of debt restructuring, this is the best option, a bank and a court. Why did I write that the most acceptable option is to initiate the procedure from the borrower? In this case, the bank is more willing to meet, offers more loyal conditions. You do not hide, do not refuse to recognize the debt for yourself and the need to pay it off, you ask for help.
It’s a completely different situation when for some reason you don’t inform the bank of a difficult financial situation. Repeated delays occur. The Bank perceives this as an elementary reluctance to pay. Therefore, the conditions for restructuring will be more stringent.
Last resort is the court. Some borrowers specifically pull it up to this stage. This desire is connected with the fact that the court often takes the side of the debtor. Fines, penalties for non-payment, and sometimes interest on a loan may be waived. Such a development of events is completely unprofitable for the bank. But the borrower must also present a solid evidence base for his difficult financial situation. Do not overestimate your legal abilities!
Benefits of Restructuring
Since both borrowers and banks are willing to go to this procedure, it means that it is beneficial to both parties. Let's look at the pros for both those and others.
Benefits for borrowers:
- The monthly debt burden (but not the total loan) is reduced in case of an increase in the loan term.
- If there are no delays, your credit history does not spoil. Some borrowers care about their reputation because they expect to receive loans in the future.
- You avoid meetings with collection agencies and do not receive attention from the bank's internal debt collection services. Keep your mental health and nervous system in relative peace.
- Save on legal costs, legal advice in case of bringing the case to court.
- Get a break (during your credit break) to get your financial affairs right.
Benefits for the bank:
- The bank does not lose the client, but merely changes the terms of debt repayment. On this, he also makes good money. Later I will show a specific calculation on the numbers.
- Saves on legal costs and collectors.
- It does not worsen its rating, because the presence of overdue debt in the balance sheet structure leads precisely to this result.
- It does not worsen its financial situation, because it does not spend the money of the reserve fund, specially created to pay off the debts of unscrupulous borrowers.
In general, some solid pluses. But a fly in the ointment will still be found. Let's look for it when answering the question of how to make a restructuring to an individual.
Types of restructuring
Banks offer the following types of debt restructuring:
- loan extension
- credit holidays
- loan currency change.
Let's consider them in more detail.
In this case, the bank increases the loan repayment period for the borrower by reducing the payment amount. The monthly financial burden on the debtor decreases, but the total amount of return increases. I will show you with a concrete example.
You took a loan of 500,000 rubles at 15% per annum for 3 years. Monthly payment - 17,333 rubles. Overpayment on a loan - 123 976 rubles. Under the restructuring program, you have increased the loan term to 4 years. The monthly payment was 13,915 rubles (decreased by 3,418 rubles). But the overpayment on the loan became 167 938 rubles (increased by 43,962 rubles).
On the one hand, you will pay less per month, but a whole year longer. And most importantly - this is a decent amount of increase in overpayment. This is the advantage of restructuring.
Credit vacation
Another restructuring option is a credit vacation. Not all banks offer it. Consider 2 programs:
- Tinkoff Bank
You can skip the monthly payment (1, 2 or 3 times depending on the loan term). Connection fee - 0.5% of the initial amount. 3 months after the connection, you can activate this service, but not earlier. If the loan term is 1 year, then you have the right to skip 1 payment. If 2 years - 2 payments and 3 years - 3 payments.
Every six months you can skip the monthly payment (not earlier than 6 months after receiving a loan and not later than 3 months before the repayment ends). Each missed payment increases the loan term. The service is connected for free.
Change in loan currency
In the early 2000s, when the mortgage program was only gaining momentum, many citizens took loans for housing in foreign currency. It is not worth telling what this turned out to be for them during the years of the sharp fall of the ruble. Therefore, some banks in the restructuring program provided for the conversion of foreign currency loans into rubles.
I think that it was this path that helped significantly ease the debt burden of borrowers.
What is a restructuring program?
The first thing I want to draw attention to is that any program is compiled for a specific borrower. Therefore, it is difficult to find information on requirements, parameters and types of assistance on the official websites of banks. The most detailed such program is presented by Sberbank. On her example, and see how to restructure a loan.
Sberbank offers 3 options for restructuring.
What steps should be taken to restructure your loan:
- Fill out an application for restructuring in the form of a bank.
- Collect and provide the bank with a package of documents (a complete list is on the site).
- Wait for the decision of the bank. If it is positive, then sign the amended terms of the loan agreement.
In fairness, it is worth noting that Sberbank honestly (albeit in very small print) warns that the overpayment may increase. And he does not restructure credit card debt.
As usual, I carefully studied more than 100 feedback from borrowers regarding restructuring issues at Sberbank. Almost all of them relate to mortgages. We will talk about it below. But the overall result of the analysis is deplorable. Applications are not even considered for weeks, but for months. The response to the indignant reviews of citizens on the Banki.ru portal is dealt with by the customer care service of Sberbank PJSC. Sounds like a mockery.
State program to help borrowers
Mortgage restructuring deserves a separate discussion. I have already mentioned above that the largest number of reviews come precisely on this issue. And that is understandable. Unlike consumer loans, a mortgage is issued for a long term. During this time, the interest rate changed significantly.
In 1999, it amounted to 35% with a loan term of 5 years, and in 2006 - already 14.9%. Until 2008, the decline continued. Then the swing began again. In 2014, the rate was 17-20%. Finally, today it has a record low value (about 10%).
In these conditions, in 2017 and 2018, the demand for mortgage loan restructuring sharply increased. DOM.RF JSC (formerly AHML), 100% of which is owned by the state, has developed a special program to help borrowers. Consider its main parameters.
Not everyone can get help, but only the following categories of citizens.
In general, the circle of those who can count on support is quite wide. But do not forget that you must prove that you need help.
About 100 banks, including regional ones, participate in the state program. This is where you apply. Make sure that your appeal meets all the requirements.
What can the state program offer:
- Change of the loan currency at the rate not higher than that set by the Bank of Russia and setting the rate not higher than 11.5% per annum.
- Decrease in the remaining loan amount by 30%, but not more than 1,500,000 rubles.
- Write-off of the penalty (except for the one that has already been paid).
Please note that the program is launched by a special decree of the Government of the Russian Federation (the last of August 11, 2017). It allocates funds from the budget for its implementation. Accordingly, it will act until the moment when the money runs out. In banks, as a rule, the approximate end date of applications is known in advance.
In any case, if you do not fit the requirements of the state program, there is always the opportunity to contact the bank to participate in the usual restructuring program.
Analysis of customer reviews showed that the program works with serious failures. Terms of consideration of documents are several months. People don’t get feedback. One gets the feeling that the allocated billions of rubles simply dissolve in the air, not reaching the needy.
Here is just one of dozens of reviews.
Conclusion
It is difficult to predict your earnings for several years to come. Often people take loans, especially mortgages, for more than one year. Anything can happen over the years. Everyone understands this perfectly: both banks and the state. They can better than us imagine the most negative version of the development of events in our lives, because they face it every day.
Therefore, there is nothing shameful in thinking about the possible ways out of the crisis at the first sign of impending difficulties. What do you choose? Refinancing, restructuring, bankruptcy of an individual? The business is yours. The main rule - do not delay decision making. Not only the quality of your life, but also your loved ones depends on it.
What is credit restructuring and how does it go at Sberbank? Who assists debtors in debt restructuring? What are the features of restructuring mortgages with the help of the state?
Hello dear readers of HeaderBober business magazine! I’m Denis Kuderin.
Today we will continue to study the multifaceted and extensive topic of bankruptcy. The issue that will be addressed in a new article is debt restructuring.
The topic will be interesting and useful to everyone who at least once took money on credit, as well as to those who are interested in current financial problems.
In this article I will share my personal experience.
So let's get started!
1. The main reasons for debt restructuring
To begin with, we will determine what debt restructuring is.
This is a measure applied to debtors in default status — that is, to those borrowers who for some reason cannot service their credit debts.
Restructuring involves a review of the current situation with respect to interest, amounts and schedule of payments. In fact, this is a kind of attempt to restore the solvency of the borrower by providing him some credit benefits.
If you are no longer able to make regular payments on loans, do not panic and despair. Another vicious line of behavior is to let the situation drift, expecting that the problem will resolve itself.
Alas, it will not resolve. People who, when delinquencies occur, begin to ignore communication with creditors, make a big mistake.
The best option in such cases is to explain the situation to bank employees very frankly. Most likely, the company will meet you by proposing to restructure credit debt.
Reasons for initiating the restructuring procedure:
- loss by the borrower of the main source of income (dismissal, closure of his own company, retirement, failure by the employer to fulfill his salary obligations);
- illness, trauma, accident that caused disability;
- a sharp change in the exchange rate (if the loan was taken in foreign currency);
- changes in payment terms by a financial company
- giving birth to a child and taking leave on this occasion, changing marital status and other circumstances affecting the level of the debtor’s cash expenditures.
The issue of restructuring is decided on an individual basis: in any case, the reasons for revising the terms of the loan must be valid.
Typically, banks need documentary evidence of the borrower's insolvency, but sometimes restructuring is carried out by financial institutions for commercial purposes.
The term applies both to individuals and to legal entities. Even public debt can be restructured. An example is creditors writing off 50% of Greece’s debt after the 2011 Brussels agreement.
Close and sometimes identical restructuring of the concept - refinancing and refinancing. Often, restructuring is the outcome of an arbitration trial in a bankruptcy case for an individual.
3. How is the restructuring of the loan - the main stages
Any loans are subject to restructuring - targeted, consumer, car loans, mortgages.
Consider the scheme under which the terms of the contract are being reviewed in one of the most popular financial institutions of the Russian Federation - Sberbank. By the way, the branches of this bank also operate in the countries neighboring Russia - Kazakhstan, Ukraine and others.
The general algorithm of actions is as follows:
- The client fills out the questionnaire in the prescribed form. The document indicates the reasons for insolvency or deterioration of the financial situation, the corresponding columns contain data on the property of the debtor, its income and expenses, marital status.
- The payer is invited to choose a method of refinancing.
- The questionnaire is sent to the department for work with debts.
- The client communicates with representatives of the department - a plan of further actions is jointly drawn up.
- The debtor collects the necessary package of documents, which includes data on the loan, medical certificates and other papers.
- During the regulated period, the bank decides on the revision of the contract.
- In case of a positive verdict, a new credit document is signed.
Other banks may ask you to write a statement on the restructuring of the loan. In fact, this is an analogue of the questionnaire, but in a looser form - without strict columns and sections. The statement also needs to indicate the reasons for insolvency, which are then documented.
4. What features does restructuring of 2018 mortgages with the help of the state have?
Mortgages are especially difficult for borrowers whose financial situation is suddenly changing. This is understandable - a mortgage is taken for a large amount and a long period of time. In addition, under the terms of the contract, the bank may sue the apartment purchased on credit in its favor.
In the context of the economic crisis, many mortgage debtors face insurmountable difficulties. Revenues are declining, and payments remain the same: a huge number of borrowers today are not able to continue to pay bills.
Since 2015, a state program for the restructuring of mortgage loans has been operating in Russia to help debtors. The interests of payers are represented by a federal structure called AHML - the Agency for Housing Mortgage Loans.
Using the mentioned program, borrowers can not only change the clauses of the loan agreement in their favor, but also reduce the total amount of debt by 600 thousand rubles. There is also a reduction in monthly payments to 12% per annum and a deferment (credit vacation) of 1.5 years.
To initiate a state aid program for mortgage debtors, real estate must meet certain requirements.
Today they are as follows:
- housing should be the sole residence of the borrower and his family;
- apartments (houses, cottages) should not be expensive (elite class) - the price of housing should not exceed the average cost by more than 60%;
- the size of the apartment should not exceed 45 m 2 for a 1-room apartment, 65 m 2 for a 2-room apartment and 85 m 2 for a 3-room apartment;
- more than a year should pass from the date of execution of the contract.
The foregoing does not apply to large families - for them the state provides preferential conditions for the meter and type of housing.
There are also personal requirements for debtors.
The following categories of citizens are entitled to use the program:
- disabled people;
- war veterans;
- parents of minor children (trustees and guardians);
- loyal payers who previously had no problems with mortgage payments, but acquired them as a result of changing economic circumstances.
In the latter case, it is required to provide documentary evidence of the fact that the financial situation worsened for reasons beyond the control of debtors. For example, they were fired for reduction or the company they worked for became bankrupt.
5. Credit debt restructuring - 7 main types
There are several types of restructuring. Sometimes the choice of the method of refinancing is provided to the client, but more often is determined jointly by the creditor and the debtor.
Consider the most popular types of restructuring used in most Russian banks
Type 1. Credit extension
The term "extension" means "extension." Therefore, as a result of such a procedure, the term of the contract increases, and the regular monthly payment decreases.
Example
Initially, the loan amount was 200,000 rubles, and the term was 2 years. At a rate of 30% per annum, monthly payments amounted to 11,180 rubles, and the amount of overpayment was close to 69 thousand.
After six months of payments, the payer realized that he could not cope with the loan. He decided to extend the period by 12 months. The bank went to meet the debtor, increased the term and reduced the payment to 7,668 rubles per month. But do not forget that the amount of overpayment with this option increases to 92,000 rubles.
Prolongation is a way to delay the end of a loan agreement. At the same time, the payments themselves do not disappear, but stretch in time. Imagine a sandwich on which oil is spread with a thin layer - the quantity of oil itself does not decrease.
Type 2. Credit holidays
Everything is simple here - the debtor stops paying the loan body or interest on it for the period regulated by the bank. Such benefits are provided at the birth of a child, in studies, sometimes while serving in the army. Vacation periods vary from 3 months to 2 years.
The most profitable option for the borrower is when he is allowed to not pay a dime for 3-6 months at all. During this time, the debtor puts his financial affairs in order - he gets a job or finds an additional source of income.
However, such vacations are rarely provided by banks, since by definition they are unprofitable for a financial institution. Most often, you still have to make some payments, but one way or another, the client gets a break and at least temporarily gets rid of psychological oppression.
Type 3. Change in lending currency
During the current economic crisis, it became difficult (or even impossible) for many borrowers to repay loans taken in foreign currency.
Transferring a debt into the ruble equivalent is beneficial for the client, but not for the bank. For this reason, financial companies rarely use this type of refinancing.
Type 4. Interest rate reduction
The loan rate is reduced subject to an impeccable credit history of the debtor. At the same time, the total amount of overpayment remains the same or even increases. The monthly load on the borrower's wallet is reduced, which allows to slightly improve living conditions.
View 5. Reduced monthly payment
In fact, this type of refinancing is similar to a loan extension. The difference is only in terms and documentation.
With a decrease in the monthly amount, the loan repayment period automatically increases. The total amount of the overpayment also increases, since no one cancels the payment of interest, regardless of the duration of the loan.
Type 6. Write-off of the penalty
Some banks give the debtor a deferral of payment of fines and penalties, or even write off these amounts.
However, I’ll say right away that such a measure is applied only in extreme cases - for example, in judicial recognition of bankruptcy or documented difficult life circumstances.
View 7. Combined option
A mixture of several types of restructuring - for example, prolongation is combined with writing off fines or changing the currency of the loan. It is practiced, again, in special cases and by no means in all financial companies.
6. How to choose a bank during the restructuring - practical tips and advice
Restructuring (refinancing) of a loan is often used by payers as a way to repay an existing loan through a new one.
A borrower who has taken a loan on unfavorable terms may apply to the same or another bank with a proposal to take another loan and to get rid of the already existing debt.
When choosing a bank for restructuring, experts advise paying attention to the following points:
- financial institution policy regarding on-lending;
- amount of commission for a new loan;
- conditions for issuing a re-loan;
- reputation of a financial institution.
Some banks are particularly active in refinancing issues. Let's consider some of them.
1) Interprombank
founded in 1995. This is a universal financial organization that provides a full range of banking services to individuals and legal entities. The bank is also engaged in foreign exchange operations, operates in the stock markets, offers clients professional legal and financial consulting.
The following options are available for customers with the loan refinancing service:
- any number of loans for restructuring;
- debt refinancing up to 1 million rubles;
- reduced single payment.
How to refinance at Interprombank? Send an application, provide documents and get a new optimized loan. Interprombank combines loans of any banks with a decrease in monthly payments and interest rates.
2) Sovcombank
- A credit doctor for those who are denied credit and refinancing everywhere. The easiest and most reliable way to improve your credit history. The bank provides an individual refinancing program for each client.
The interaction algorithm is simple - you fill out an application on the website, present your passport at the nearest branch of Sovcombank, draw up the product “Improving your credit history”. There are other refinancing programs.
What does the client get? Reducing the monthly payment, changing the loan terms in the direction necessary for the user, the return of property taken on bail and the provision of credit holidays.
- consumer loans, credit cards, restructuring of loans of other banks. Just transfer your loan to VTB, and your debt burden will be an order of magnitude less. Special conditions are provided to civil servants.
Other benefits include:
- long credit holidays;
- independent choice of a convenient date for payment;
- voluntary insurance.
Filling out an application does not take more than a few minutes. The bank takes a decision in 15 minutes. You just have to come to the office with documents and arrange a restructuring.
The table shows the main parameters of the restructuring in the considered banks:
№ | Bank | Amounts and terms of refinancing | Interest rate, % | Features |
1 | Up to 1 million rubles. from 6 months to 5 years | From 14 | Customer has the right to cancel insurance and commission | |
2 | Up to 3 million for a period of 36 months | 12-14 | Especially complacent to retirees and mature clients | |
3 | Up to 3 million for a period of 6 to 60 months | Up to 14.9 | Ability to skip vacation payments |
7. Who can assist in the restructuring of the loan?
It is difficult for an ordinary borrower to understand all the nuances of restructuring. Often, favorable terms of banks only seem to be such - in fact, debtors, having taken a new loan, find themselves in no less enslaving conditions.
Some banks may refuse to restructure at all, citing a bad credit history of the debtor or other subjective factors.
The best option in such circumstances is to contact professional law firms that help citizens in providing loans on favorable terms.
In Moscow, the following companies deal with such issues:
Kommersant Credit - an institution, all of whose employees have experience in bank security services - A team of professionals in the brokerage market of banking services;
Credit Laboratory - An effective and efficient solution to any credit issues. Long-term experience of the company allows to prepare the client for specific requests of credit organizations;
“Credit Decision Service” - A company dealing with lending since 2010. It assists individuals and legal entities in obtaining any types of loans, having well-established contacts with banks.
The services of these and other credit brokers are, of course, paid, but as a result such companies will help save debtors much more. Remember that lowering interest rates even by tenths of a percent is saving tens of thousands of rubles from your pocket.
8. Conclusion
Draw conclusions. Restructuring is a good way to get rid of credit debt without unnecessary financial losses. True, it is far from possible to initiate such a procedure in all situations.
If your loans have become an unbearable burden - it is worth considering whether to change the terms of the agreement to more favorable ones. Professional lawyers will help you do this, plus our good advice.
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