Restructuring a short term loan to be long term

[Alexandoy]

When you are saddled with debts that you seem to be having a hard time in paying on time that clearly means your capacity to pay is already below par. Take for instance a loan of 1 year to pay but all you can afford is 30% of the monthly installment. What you do is to borrow money and acquire a pile of debts. In the end you will be losing much in the interest of the small debts.

Restructuring the loan is the advice of the bankers. In our example of a problematic loan that is 1 year to pay you can get a loan to pay if off. But the new loan is 3 years or maybe 4 years to pay so that your installments will be lower and affordable. The term is longer but you are assured that you can pay back on time and would not suffer penalties.

 

[Mika]

I don't think your loan terms can be changed once you borrowed money (at least that's what happens in the banks in my home country). You cannot change one-year loan term to 5 years term, you cannot change $2000 loan to $3000 unless you have applied for over draft. When you get a loan, you should think to consider all the options.

 

[Abigael]

That is a very good idea. Restructuring a short term loan to be a long term one will really give you time to get your act together. You will be able to actually plan well and be able to afford to pay the monthly installments. I am just not sure if banks can actually restructure them for you.