Payment difficulties

Extension of the agreement term or repayment period can help if the borrower’s income has dropped on a permanent basis, for example, if the salary has been cut or a family member has lost their job. Extension of agreement term means that the monthly payment will decrease, whereas the loan repayment period will be prolonged.

Often, extension of the agreement term does not lead to the desired effect if the amount of obligations is large and the loan repayment period has been rather long to begin with. In such an event, the reduction in monthly payment is minor. Please take into account that, in case of a mortgage loan, the maximum loan period may not exceed 30 years.

Combining smaller loans into one bigger loan may also help in situations where the borrower’s income has dropped, for example, the salary has been cut or job has been lost, and maintaining current payments is challenging. Consolidating several loans into a single one and drawing up a longer repayment schedule will reduce the existing monthly payment and the loan obligations are discharged gradually.

• Mortgage loan — fill out the application and describe the situation in the comments field.
• Consumer financing products — go to “My obligations” and select “Changes” > “Other changes” next to the respective loan or, alternatively, fill in the loan application and describe the situation in the section “Additional information”.
• Leasing — send the bank a message via Internet Banking.

• Mortgage loan — fill out the application and describe the situation in the comments field.
• Consumer financing products — in any consumer financing section choose “Apply as a co-borrower” and fill in the application fields.
• Leasing — under section “Car leasing” choose “Guarantor’s application” and fill in the application fields.

If meeting existing loan obligations is expected to be out of reach in the long-run, switching the home or car could be a workable solution. Moving to a smaller apartment or switching from an expensive car to a more economical one will allow saving on payments for the apartment and fuel.

Money saved as a result of such a switch can be applied towards paying off a loan. This solution will also allow reducing monthly loan payments. We’d like to remind that the bank’s consent is mandatory for such deals, hence we suggest first consulting the bank’s specialists. Please note that finding a suitable solution for property switch may be time-consuming which means that you might have to be flexible and adapt to the circumstances.

If a lasting decline in income is expected, one of the solutions is selling the loan collateral (real estate or vehicle) as a way of avoiding the potential financial difficulties. We recommend starting the process of selling as soon as possible as in that case you’ll have more time and might fetch a better price. Consulting the bank before selling the property is a must.

Sometimes it is enough to sell one’s belongings to overcome temporary issues. By putting up an ad on the web or in paper you can sell household appliances or furniture and the money obtained will help you survive the difficult stretch. Take into account: selling items bought on hire purchase requires consent by the seller or the financing institution.

When all other options have been exhausted, an enforcement officer is engaged and asked to sell the property owned by the borrower. Such a solution is mainly applied in cases when the borrower or the lessor is not interested in resolving their situation and avoids communication with the bank: does not answer calls, regularly changes their phone number and place of residence, or has fled the country altogether.

In such cases, the Bank is forced to exercise its legal right as the creditor and unilaterally withdraw from the agreement, demanding early performance of obligations. The enforcement officer auctions the property as a result of which its price may be lower than the market price. Additionally, the debtor will also have to cover the law enforcement officer’s expenses which are roughly 10% of the outstanding obligations. To avoid such a scenario, we recommend contacting the bank immediately when problems with loan payments arise, that way looking for the most appropriate solution to the situation at hand together.