Not many of us know that it is possible to reduce the interest on an existing loan. Meanwhile, many banks willingly go to meet their borrowers if they find themselves in a difficult financial situation and are unable to pay according to the existing schedule.
Instructions
Step 1
Banks always offer debt restructuring to those clients who inform about upcoming or coming problems in advance. This can be an increase in the loan term, a delay in the repayment of the principal debt, or a decrease in the interest rate. Of course, banks are not too willing to do this, because they will lose part of the planned income. But nevertheless, it is more profitable for the bank to receive a certain amount less than in the event of a delay, not to receive it at all.
Step 2
On average, banks are ready to reduce the loan rate by 1.5-2 percentage points. However, one should not delude oneself. They usually grant this benefit for a period not exceeding two years, i.e. not a time when the borrower is experiencing financial difficulties. Some banks after this period again raise the interest rate and even taking into account the lost income for the grace period.
Step 3
To reduce the interest on the loan, you must contact the bank and submit documents confirming the deterioration of your financial condition. This can be a copy of a work book if you were fired, a certificate of salary if it has decreased, a sick leave or a doctor's certificate if you cannot fulfill your debt obligations for health reasons.
Step 4
However, after analyzing your condition, the bank may consider that you will not be able to pay off the loan even after refinancing it, and offer to sell the property for the acquisition of which the borrowed funds were spent. So in this situation, the main thing is not to overdo it.
Step 5
Banks can lower the interest rate in the following case. For example, a borrower took out a mortgage loan three years ago at 16% per annum, and now the rate on a similar loan is 13%. But this situation also has its own pitfalls. First, you should not think about refinancing if the difference between interest rates is small, at least 3 percentage points. Secondly, the difference from reducing the interest rate for annuity payments will not be too noticeable, especially if you paid more than a third of the loan. Now, in the amount of the payment, a significant part is the amount of the principal debt, and you have already returned the majority of the interest to the bank.
