How to repay a loan if you have no money? The main thing here is not to let the situation go on its own. It’s a mistake to think that the bank will forget about the loan. Interest, fines, penalties – everything will be properly charged, and the debt will grow like a snowball. We will tell you about how you can get Debt Relief.
What to do if you have no money to pay the loan?
Come to the bank and tell them about the situation. The sooner you do that, the better. You’re paying off your credit in a good way. The time for the next payment has not come yet, but something has happened and you understand that difficulties cannot be avoided. Come to the bank and tell them about it. Bring with you documents that will confirm what you said. If you quit, take your employment card or a certificate from Human Resources, if you’re sick, take a doctor’s certificate. It may help or not, but without it, the bank won’t listen to you at all. Then there are two ways out of the situation, if you solve it peacefully.
Restructuring the loan
What is loan restructuring? Loan restructuring is changing the repayment schedule to more flexible and loyal to the borrower. The bank needs its money back. And if it sees that you have been paying well, but you have faced difficulties and you are ready to prove it, it can go towards it. There are several options for restructuring the loan:
- credit holidays – deferral of payments for a while;
- the ability to repay only the body of the loan for a period of time to reduce interest charges;
- extending the term of the loan agreement and, as a result, reducing monthly payments;
- a decrease in the interest rate and, as a result, a decrease in monthly payments.
Refinancing the loan
Credit refinancing is a registration of a new loan in another bank to repay the current one. At registration of this loan, it will be clearly indicated what amount will be used to repay which loan in which bank. In other words, you can apply to another bank with a proposal to re-lend you on more favorable terms. If the other bank agrees, it will be the refinancing of the loan.
What is refinancing?
For example, you have a debt in one bank. This bank did not restructure the loan, it demands to repay it, but you do not have such a possibility. Then you type in the Google request “re-lending loans” – and you get several offers from different financial companies and banks at once. Refinancing the loan can help if the bank does not agree to the restructuring or when its conditions are unacceptable for you. But it only makes sense when the conditions for a new loan are better than the current one. Specifically:
- the term of the new loan agreement is longer than the previous one, it will reduce the monthly payment;
- the effective interest rate should be lower (at least not higher);
- the new bank should not introduce any additional commissions.
Refinancing may alleviate the problem, but will not solve it in principle. The loan will have to be repaid one way or another. Refinancing is also sometimes used to combine several loans into one. It is easier to serve one loan than three or five, especially if they are in different banks. The form of a refinancing loan looks like this:
- Find out how much you need to repay your current loan in full. Do not calculate the debt for today, but what it will be in a few days. It will take time for the new bank to make its decision.
- Choose a bank that has a refinancing service and submit an application.
- Get the bank’s decision. If the bank approves your application, it will sign a new agreement with you. After that, the bank will send money to pay off your debt.
You can also find specialized services that will help you to get credit card debt relief.