by Randall Arosemena of PayMe Software
Email: randallarosemena@paymesoft.com
Website: https://paymesoft.com/plataforma-cobros/
Some of us have heard in recent months the term debt restructuring, however this is a rather abstract concept for those who do not know much about banking. I will try to explain it in my own words:
Debt restructuring is the modification of the initial conditions of a loan or bank obligation, as a result of the deterioration of the client's current conditions. It is an agreement between both parties, where it allows the bank to recover the funds either in a longer term or generating less income at the end, and the client allows him to face his obligations in a more comfortable way.
Some types of restructuring are:
- Decrease in the interest rate: the monthly payment that is paid is composed of the capital (amount that we must return to the bank, which in a large part is taken from customer deposits) and the interest product of the rate at which we borrowed the funds (interest income from banks), a decrease in the agreed interest rate, can be transformed essentially is two modifications. The first is an adjustment of the monthly payment, since the lower the rate we must pay, also decreases the monthly amount (the most realistic for the current situation) and the second option is to keep the same monthly payment and pay more to capital monthly, which leads to the repayment of the obligation in the short term.
- Term extension: when we take a decreasing credit (mortgage, personal loans, car loans, etc.) we have a start date and a final date or last payment; an option that banks can give is to extend the final date of payment, which in turn allows the bank to reduce the monthly payment of the client so that it can meet its obligations.
- Moratoria de X días: en este caso lo que se están planteando es que el cliente no realice los pagos correspondientes a las mensualidades contratadas por un espacio estipulado de tiempo. Es importante aclarar que esto no quiere decir que los bancos están condonando estos montos, lo usual en estos casos sería aplicar alguna de las condiciones planteadas arriba. Por ejemplo, no pagar esos 3 meses, pero extender el plazo de la obligación para cubrir estas mensualidades caídas. Otro escenario sería colocar todo este monto no pagado como un último pago(acumulado) o «balloon», de esta manera se le da un respiro momentáneo a los clientes para afrontar la situación actual.
There is another series of tools that banks have to restructure the debt of their clients, and that we can address and deepen in later articles, however the most important thing is that you inform yourself to choose the formula that best suits your needs.
We hope this article has served to quickly and easily explain the most common scenarios.
