How to tackle loan repayment difficulties

• If you've lost your job, first go to the State Employment Agency and register as an unemployed person. Having the status of an employed person will enable you to:
  • Receive the unemployment benefit;
  • Get information about vacancies and job offers;
  • Participate in temporary, paid public works programme;
  • Get professional training or re-training;
  • Get a stipend during professional training.
• In case of health problems, which prevent from performing job duties partially or completely, you need to get an official note from your doctor.
• Give consideration to asking friends or relatives for help or support, by them acting as guarantors, as well as considering whether you have a possibility to provide additional collateral (other real estate to mortgage) for the existing loan.
• Give consideration to renting out your property and living with your parents or other relatives for a while.
• Give consideration to selling your car or other real estate you own, as well as considering other actions that would improve your solvency both in the short run and in the long run.
• Together with your Financial Consultant, complete the loan restructuring application, which is available at any Swedbank branch.

1. Think about what you can do yourself.
2. Contact the bank by sending a message by e-mail: risinajums@swedbank.lvor on the Internet Banking site's section "Bank messages", by calling 67444444 or by visiting any Swedbank branch.
3. Presenting documents to the bank. To start addressing the situation, the bank employee may request you to supply various documents relevant to the situation. For example, rent contract, employment contract, contract which confirms your status of being unemployed, a note from the doctor confirming incapacity to work, in case of struggling with mortgage payments.
4. Together with the bank employee, the best solution will be found which will make it easier for you to repay the loan.

Each situation is treated on a case-by-case basis, hence it is vital to indicate the circumstances, which have led to insolvency - be it job loss, division of property due to divorce, becoming unable to work, or other serious reason.

During the grace period, you need to do your best to restore your solvency so as to be able to meet loan payments according to the new schedule agreed between you and the bank by finding the best solutions.

Swedbank offers the following solutions for its customers, which may be combined depending on the case at hand:

• 'Loan holiday' or postponement of principal repayments - for a certain period, you are allowed to only pay interest on the loan amount.
• Postponement of all or some loan payments by issuing additional finance for covering interest payments on the loan. During such period, the customer will have neither loan principal repayments, nor interest payments. This will take your mind off loan payments during time when you are, for example, looking for a new job. This solution will be offered only in cases if you have convincing arguments that the situation would change after the postponement and you would restore your solvency, for instance, by finding a job or selling the property.
• Loan repayment period extension with a view to reducing monthly payments.
• Merging short-term loans at Swedbank with long-term obligations. This means that the repayment period for short-term obligations is extended and the interest rate is reduced, thus reducing the total monthly payment.
• Change of loan repayments date. That could be a solution in case of change in the date the salary, benefit or other income is received.

The bank also supports and offers solutions to clients who have taken out short-term loans, such as credit cards, lines of credit, consumer credits, or hire purchase. Together with our specialists, you will find the best solution. However, one should bear in mind that the best solution will be found if you approach the bank about your repayment difficulties in good time.

Depending on the type of the short-term loan, Swedbank offers the following options to its customers:

• Change of loan repayments date. That could be a solution in case of change in the date the salary, benefit or other income is received.
• Loan repayment period extension with a view to reducing monthly payments.
• 'Loan holiday' or postponement of principal repayments - for a certain period, you are allowed to only pay interest on the loan amount.
• Merging short-term obligations with long-term obligations. This means that the repayment period for short-term obligations is extended and the interest rate is reduced, thus reducing the total monthly payment.
• Merging all existing short-term loans into a single consumer credit.
• Loan currency change. Swedbank offers its clients the option to change the existing Consumer Credit currency.

Swedbank offers the following options:

• Temporary postponement of payments - for some time only interest on the loan amount is paid. This will take your mind off loan payments during time when you are, for example, looking for a new job.
• Change of loan repayment schedule (from operating lease to finance lease), change of interest rate type (from fixed rate to variable rate) or extension of repayment period, as a way of reducing monthly payments.
• Loan currency change.
• Change of loan repayments date. That could be a solution in case of change in the date the salary, benefit or other income is received

• A court bailiff sells the mortgaged property.
• The property is repossessed and auctioned. However, if it is sold for less than what is required to discharge the outstanding loan balance, the difference will still be considered a debt.
• A debt repayment schedule will be drawn up for monthly payments for any remaining part of the loan. If these payments are defaulted, late interest will continue to accrue.
• The court bailiff may enforce collection against the debtor's or guarantor's movable and immovable property or other income. The court bailiff has the authority to make the debtor's employer withhold money from the debtor's monthly pay and to transfer it to the court bailiff until discharge of the amount of debt in full.
• The court bailiff has the authority to distrain (attach) any assets owned by the debtor and to freeze any accounts with Latvian banks until discharge of the debt obligations. Should any other asset come into the ownership of the debtor or the guarantor, it may be confiscated.
• All expenses related to court bailiff services are borne by the debtor.

• The car is repossessed and sold at a price determined according to the market value and demand.
• If the car is sold at an amount, which does not cover the entire outstanding lease or loan amount, or the lender has incurred any loss, the difference will still be treated as a debt, and failure to pay it will result in late interest being charged on that difference.
• A debt repayment schedule will be drawn up for monthly payments for any remaining part of the loan. If these payments are defaulted, late interest will continue to accrue.
• The court bailiff may enforce collection against the debtor's or guarantor's movable and immovable property or other income. The court bailiff has the authority to make the debtor's employer withhold money from the debtor's monthly pay and to transfer it to the court bailiff until discharge of the amount of debt in full.
• All expenses related to court bailiff services are borne by the debtor.

• The debt case is handed over to a collection agency and collection is enforced against both the debtor and the guarantor.
• If the collection process does not lead to repayment of the debt, the claim is lodged with court. To fulfil the court's judgement, the case is handed over to a court bailiff.
• The court bailiff then enforces collection against the debtor's and/or guarantor's movable and immovable property or other income. The court bailiff makes the debtor's employer withhold money from the debtor's monthly pay and to transfer it to the court bailiff until discharge of the amount of debt in full.
• The court bailiff distrains (attaches) any assets owned by the debtor and freezes any accounts with Latvian banks until discharge of the debt obligations. If the customer has a number of loan (short-term and long-term) agreements with the bank, then collection may also be enforced against the mortgaged or pledged property for falling overdue with short-term loan payments.
• All expenses related to court bailiff services are borne by the debtor.
• Defaulting on loan obligations may result in not being able, or being less able, to borrow again in the future from Swedbank and other credit institutions.

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.

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.

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.

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.

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.