Q: What should I do if I’m currently struggling with my monthly mortgage loan payments.

A: When you find yourself in such a situation, you should certainly come to the bank and frankly tell about your circumstances. The first thing to do is agree on restructuring of the loan, which normally means things like change in the loan currency and an extended period of the loan agreement. Every decision is taken on a case by case basis. Mortgage loan restructuring allows to reduce monthly payments to match the borrower’s income in less than a month. Swedbank cares for the long-term financial stability of clients and is willing to deal with the changed circumstances together with the customer.

Q: What should I do if lose my job but have a mortgage loan to pay?

A: When you find yourself in such a situation, you should certainly come to the bank and frankly tell about your circumstances. The first thing to do is agree on restructuring of the loan, which normally means things like change in the loan currency and an extended period of the loan agreement. Every decision is taken on a case to case basis. Mortgage loan restructuring allows to reduce monthly payments to match the borrower’s income in less than a month. Swedbank cares for the long-term financial stability of clients and is willing to deal with the circumstances together with the customer.

Q: I have a mortgage loan. My income has now decreased substantially. I would like to have my monthly payments reduced.  Will change of terms of agreement result in a substantially larger interest rate? Up until now, I’ve always been on time with my payments.

A:  When the bank issues a loan, it considers a number of parameters in setting the margin interest rate on the loan: the price of money on financial markets, cost of capital, degree of risk, customer’s credit history, regulatory capital requirements, etc. In the light of the fact that a number of the rate-setting parameters have changed substantially, the bank’s offer has a valid economic reason. It should be taken into account that any change in the agreement to reduce or extend loan principal repayments means additional risk to the lender, which may substantially push up the total interest rate. However, in case of loan restructuring, the bank offers a temporary decrease in monthly loan payments, so that all changes in interest rates are not made fully on the basis of the customer’s risk profile and market level, but only to a limited extent, which is a compromise in today’s economic situation.

Q: May a guarantor (surety) take over the borrower’s obligations on the same terms as in the borrower’s loan agreement with the lender, at the same time re-registering the property in the name of the guarantor (with the borrower’s consent)?

A: The guarantor, just like the borrower, undertakes the obligations under the loan agreement to full extent and with all of their income and property, therefore substitution of the original borrower with the guarantor will in no way affect the existing terms of the agreement. However, if the guarantor qualifies for a loan considering their income, then he or she may take over the existing obligations and the collateral on new terms of loan agreement.

Q: I have purchased a car under operating lease agreement and I am unable to keep up monthly payments.

A: When you find yourself in such a situation, you should certainly come to the bank and frankly tell about your circumstances. One of the solutions is to agree with the bank on voluntary returning of the car. In such an event, the lease agreement will be terminated, there will be no more monthly invoices and no penalty will be charged. The customer won’t have to make lease payments during the process of sale of the car. In case the car is sold for less than the remaining total lease payments, the customer will have to cover the outstanding loan balance. The bank and the customer may agree on a schedule for repayment of the loan balance.

What’s the best course of action in case I can no longer afford to pay the agreed amount (line of credit)? Is there a way to reduce monthly payments?

Swedbank replies: the bank offers solutions for reducing monthly payments. We recommend to come to the bank as soon as the problem with meeting obligations arises. The sooner the process of dealing with the problems starts, the better terms we will be able to offer you. The bank employee, following assessment of your individual situation, will offer the most appropriate solution.