Why is Loan Rescheduling not that easy?

There is no certainty in life, and the same goes for our finances. Some days we may have enough, while certain situations might lead up to more expenses on other days. While this might not cause much of a problem normally, it can surely give you all-nighters if you have a loan payment coming up.

Hence, to help out their clients, many private lenders and government banking sectors offer special benefits, such as loan rescheduling. During dire circumstances, such as the prevailing pandemic, Availing this has helped millions of customers safely escape from being red-flagged by credit bureaus. However, every additional benefit comes with a set of terms and conditions for their successful application. But first, let's start with understanding the term.

What is loan rescheduling?

Similar to what it sounds like, loan rescheduling can be defined as the act of extending the tenure of an existing loan contract. A new agreement is made with the modified dates and loan repayment amounts which is then signed by both the lender as well as the client. When processed successfully, this generally ensures lower monthly installments and hence aids in saving for other expenses. Additionally, getting your loan rescheduled doesn't negatively impact your loan ID, unlike failed payments or missed out EMIs.

Now one must know whom to approach to reschedule your loan in financial institutions. 

Who offers loan rescheduling options? Let's get started.

Almost all Government financing institutions and major private lenders offer feasible schemes like loan rescheduling. Some newly set up private lending companies might also offer the same, but mostly with sky-high interest rates. As the process involves higher risks and greater interest rates, the lender needs to be financially strong to be able to cater to their customer's requirements.

In this regard, people often get confused about whether they can reschedule their loan at any point in time or there are some fixed time slots for it. Let's know about that too.

Can I get my loan rescheduled anytime?

No wonder loan modification or rescheduling can seem a pretty convenient option to many. But like a wise man once said, ‘All that glitters is not gold’ adding extra time may not be as easy or as beneficial as it may seem initially. 

• Profile compliance- Before providing you with an extended limit, every lender would want to know if or not you are reliable enough. Reportedly, every year banking institutions have to suffer great financial losses due to consumer's inability to pay at the right time. Therefore, they will scrutinize every past transaction, previous loan records, current financial statement before allowing the offer.
• Impose higher interest rates- While government-backed finance institutions might offer somewhat agreeable interest rates, private lenders might not be so lenient. Where their typical interests start from 10 percent, scheduling a loan might end up with 12-14 percent interest rates, thereby increasing your total loan amount by several folds.
• Mishap proof- Additionally, your lender might also ask you for written or physical proof of income loss or reduction before signing off the benefit. This is one of the many checks that the lender would perform to ensure their invested money won't go to waste. Thus, depending on the proof, they might allow you to reconsider your loan payment deadline or revise the monthly installment amounts.

Apart from this, there are many factors necessary for your successful enlistment to loan modifications. Hence, rescheduling a loan or restructuring it is no child's play.

Will rescheduling a loan affect my credit score?

Although the effect might be negligible, rescheduling a loan sure does raise concerns in terms of reliability. When looking for a new loan, the lender might point out the modifications, but this is often okay with many. You might be asked to submit impact-proof during the specified period or might be asked to answer a few questions. Once all reports are received, the moneylender reserves the right to pass or reject your application.

Conclusion:

Now you know very well that Loan rescheduling is never easy. The process has many turns and twists that can confuse any individual. Thus, if you are looking for customized help from highly qualified and dedicated financial solution experts, then don't forget to check out Capital Hills. Serving for years now, the site works with a broad range of customers, helping them out from sticky financial situations. Ranging from debt transfers to overseeing or rescheduling their client's finances, the company does it all, and that too within very budget-friendly pricing. Check their website today!