the Level of credit load of the borrower depends on several factors, in particular income, the size of a loan and the interest rate established by financial institution. Optimization of conditions on the loan agreement usually assumes lowering of load of the client for the purpose of elimination of risk of appearance of overdue payments. Reduction of the amount of the regular payments is considered the easiest and available way of regulation of credit loading. For this purpose it is enough to change the schedule by increase in number of monthly payments.
Optimum level of credit loading
Indexes of credit loading depend on several factors. First, the current financial position of the borrower, that is level of income and expenditures is considered. Secondly, employees of the bank take parameters of future transaction into account. The payment schedule is as a result created. Date of the regular payments, as a rule, is fixed towards the end of a month as many employers provide the salary in the twentieth. Nevertheless the borrower can insist on a choice of any other date for the regular loan payments.
Optimum is considered the level of monthly payment loading which allows:
2. It is timely to make monthly payments.
3. To reduce risk of overdue payments.
4. To avoid appearance of debts.
5. To perform scheduled purchases.
6. To replenish reserve fund for the credit.
the Financial position can promptly will worsen for the reasons, independent of the borrower. In order to avoid possible problems with cancellation of a loan in the conditions of the increased credit loading it is recommended to use a financial safety cushion. The reserve fund is created especially for execution of obligations in the conditions of origin of unforeseen situations. If the risk of appearance of overdue payments remains for the long term, it is necessary to appeal to the creditor to reconsider conditions of cancellation of a loan.
What is the schedule of the regular payments on the credit
Payment of any credit is executed on the schedule approved by the parties. The client executes the first payment exactly in a month after agreement signature. Use of other periodicity of payments is allowed, for example, cancellation of debt on the credit card with preferential terms of the transaction assumes depositing funds for 30-55 days from the moment of receiving a loan. In turn short-term loans from micropayroll companies are often repaid by one payment or the regular payments every two weeks. According to some credit programs diagrams of cancellation with quarterly introduction of means work.
influences forming of the payment schedule:
• Transaction duration.
• Source of income of the borrower.
• Existence of the first contribution.
• Date of signing of the contract.
• Method of cancellation of a loan.
the Questions connected to competent schedule development of the regular payments are solved the parties at a preparatory stage. During agreement signature the borrowers and creditors give official consent to implementation of payments on the selected diagram. The client undertakes to perform the regular payments before a deadline. In turn the financial institution has no right to require execution of financial liabilities before the specified date. There is a row of exceptions to the rules. In particular, if the borrower deliberately violates terms of agreement, the creditor can insist on early cancellation. Receivers of loans at own will can prematurely close the transaction. The similar right is affirmed by the law therefore creditors are forbidden to hinder with early payment of a loan.
Methods of reduction of payment or period on the creditIf the initial payment schedule approved and approved by the parties threatens
with appearance of overdue payments, the option with its revision is allowed. Can initiate the similar procedure both the borrower, and the creditor. Occasionally optimization of the schedule is executed by a court decision. For example, if the basic diagram of payments initially has hard errors or is accepted unilaterally without the consent of the borrower.
Methods of lowering of credit load of the borrower:
2. Refinancing of a loan.
3. Credit vacation.
4. Revision of a rate.
5. Correction of the monthly payment schedule.
6. Prolongation of the contract.
as agreed by the parties. For example, the payment deferral is used in case of origin of temporal difficulties with cancellation of a loan. If the client is not able to solve financial problems throughout credit vacation, banks can offer debt restructuring with revision of an interest rate, duration of the transaction and baseline schedule of payments. When the creditor refuses introduction of amendments to the contract, it is possible to use services of other banking institutions within programs of refinancing of the credits. Any of the listed methods of lowering of credit loading will affect the amount of payments.
On the end of a grace period throughout which payments are cancelled or the minimum payments are made, credit load of the client noticeably will increase. Without extension of the transaction the amount of payments increases. For the led-out period it is necessary to enter not only the planned, but also missed payments.
of the Form of credit vacation:
• The partial failure from payments with mandatory introduction of the minimum amount, for example, percent on a loan.
After the termination of payment by installments the borrower can discuss an issue of prolongation of the contract with change of the payment schedule with the creditor. Amendments of this sort assume preserving of stable financial loading without risk of the recurrence connected to lowering of solvency of the borrower throughout transaction validity period.
Restructuring of the credit
Conditions of the original contract sometimes promote increase in credit load of the borrower. In this case it comes to the procedure of restructuring. It is possible to reconsider one of terms of transaction or several parameters which have an adverse effect on cooperation process.
the Restructuring executed by the qualified expert taking into account needs and financial opportunities of the borrower will reduce the amount of monthly payments. As revision of the repayment schedule is followed by extension of the contract, the borrower can do without credit vacation. However postponing in certain cases is in addition applied.
of assumes Change of terms of the contract:
2. Prolongation of period of the transaction.
3. Correction of the schedule of monthly payments on the credit.
4. Postponing of the regular payments.
can Introduce amendments in the initial transaction sometimes without connection of the option connected to restructuring. If the contract signed by the parties allows to change some conditions, by agreement it is possible to reconsider not only duration of cooperation or the schedule, but also to lower an interest rate. However reduction of monthly payments can lead to appearance of the overpayment connected to commission assignments for each additional payment for the new schedule.
Change of terms of transaction is unilaterally prohibited by the law. If the creditor introduces amendments in the contract without preliminary coordination with the client, last has full authority to file a complaint to the violator or to initiate judicial proceedings. The borrower has the right to require compensating, insisting on agreement cancelation.
the Procedure of restructuring is a decision which banks use only in the emergency situations in case of increase in probability of formation of arrears on the credit. The made changes carefully are checked by experts. Unreasoned correction of parameters of the initial transaction often involves increase in an overpayment on the credit. In other words, similar changes can worsen a financial position of the client.
Refinancing of the credit
of Dazhe esli bank in which the credit is initially issued will refuse to execute restructuring or to change the payment schedule, the borrower will save an opportunity to lower financial loading by the appeal to the new organization offering refinancing. It is at the same time possible to revise several transactions, including the contracts signed on credit cards, consumer and long-term target loans.
the Second option for change of conditions of the loan agreement is refinancing. The service assumes the appeal to banking institution which suggests to extinguish operating loans of the client by output of the new credit. Terms of transaction are stipulated by the parties in advance therefore the borrower takes the active part in planning of further process of loan repayment. The service for refinancing moves ahead commercial banks which are aimed at the active extension of the customer base.
of the Condition of refinancing of the credits:
2. Development of the new payment schedule.
3. Consolidation of debts.
4. Receiving supplementary services.
5. A failure from optional payments.
6. Prolongation of duration of the agreement.
the Main benefit of the procedure of refinancing is the possibility of consolidation (consolidation) of several credits. The client undertakes to fulfill financial liabilities only before one creditor or at all on more advantageous conditions translates debt in new financial institution. of
Reduction period on the credit - Partially Early cancellationIf the borrower does not face
problems at a stage of cancellation of a loan, it is possible to enter monetary means ahead of schedule. This method of saving in the course of crediting will not allow to lower payment loading, but will give the chance to spare the large amount. In case of design of loans on standard circuits of crediting for cancellations a certain period is selected, however the borrower has the right to grant the total sum of a debt one payment before the date of the last payment specified by the contract. In this case the creditor is forbidden to accrue interest.
Algorithm of early cancellation:
2. Planning of the procedure of depositing funds.
3. Warning of the creditor of the made decision in 30 days prior to payment.
4. Implementation of scheduled payment by any convenient method.
5. Receiving in the serving bank of help about closing of the contract.
when forming by the client of reserve fund. As a rule, the financial safety cushion during process of crediting represents a certain cash amount which the borrower stores in case of emergency situations. If throughout duration of the agreement there are no overdue payments, money can be used for early cancellation.
Who can claim on reduction payments on the credit?
the Client of credit institution agrees with the selected payment schedule at an agreement signature stage therefore only reliable borrowers can claim for revision of terms of transaction. Probability of gaining access to the options connected to a payment deferral directly depends on credit history of the client.
of the Requirement to the borrower:
• The independent address with a request to reconsider terms of transaction.
• Optimum status of credit history.
• Absence of systematic overdue payments.
• Existence of a source of stable income.
• Loss of an opportunity to repay the loan for the objective reasons.
• The active involvement in search of ways for resumption of payments.
If the base for revision of terms of transaction for the purpose of lowering of monthly payments is lowering of solvency, the borrower shall assure the creditor of restoring access to a source of income. It is usually necessary to find time for search of new operation when dismissal or demotion is the reason of deterioration in a financial status. In case of increase in medical expenditures it is necessary to provide in bank help from the attending physician. Receiving additional data, the creditor raises the trust level to the client.
Thus, optimization of credit loading is executed by banking institutions for reduction of risk of appearance of overdue payments. The borrowers who are coming up against unforeseen situations of which lowering of level of solvency is result can initiate different procedures, including restructuring and refinancing of debt. Methods of lowering of credit loading assume revision of terms of transaction for the subsequent reduction of the amount of the regular payments.