Does restructuring a loan negatively impact your credit rating?

vanla sighs

If you have to restructure a loan does that have a negative impact on your credit rating with the financial institution concerned? This morning I had to contact my bank and discuss things with them, it all went fine and they agreed to restructure my loans. Repayments are now down to 50% of the original agreed. In fact they almost seemed to be quite happy to do so and seemed to appreciate the fact that I had contacted them before a time could have arisen when they would have to contact me, to date I've never missed a loan repayment. They appreciated the fact that I was foreseeing a problem rather than waiting for it to hit like a bus.

Now that's all well and good but, in reality, is my credit rating now adversely affected? I'm guessing it may well be and that should I (we) ever go for a mortgage that we could encounter problems. But we may never opt fo a mortgage here anyway. Thanks.

caddy16

Hey, no that will have no negative impact on your credit rating whatsoever. If you had waited until you missed payments then it may well have. That's why its so important to be proactive as you have been.

eagle_i

In short the answer is no, restructuring a loan does not impact on your credit rating. If you had defaulted on your repayments, yes this will be noted with the ICB, which will be a black mark against your credit rating. So long as you now stick the newly restructured repayment plan all will be fine. You really need to adhere to the repayments from now on, as a further restructuring of your loan could be difficult.

Finally, well done on taking control on the situation and contacting the bank before the problems arise. No use burying your head as it wont go away by ignoring the situation.

Cookie_Monster

eagle_i wrote: »

Finally, well done on taking control on the situation and contacting the bank before the problems arise.

Indeed.

I tried this a few weeks ago, wrote to bank explaining that I am struggling to afford repayments, with ****ty budget coming up likely to have even less money, asked to add a year to it and laid out payments under that condition and asked what other options I would have aside from this.

Got back a letter saying no chance, none of my questions answered, not even signed by anybody or have a name on it. :mad:

eagle_i

Cookie_Monster wrote: »

Indeed.

I tried this a few weeks ago, wrote to bank explaining that I am struggling to afford repayments, with ****ty budget coming up likely to have even less money, asked to add a year to it and laid out payments under that condition and asked what other options I would have aside from this.

Got back a letter saying no chance, none of my questions answered, not even signed by anybody or have a name on it. :mad:

Cookie, don't give up. Call into the bank, ask for the loan offical you dealt with when taking out the loan, bring the letter you sent them and their reply. Be nice and ask can they help you explore options that are avaible to you. If you are not getting joy from him/her, ask to speak to someone more senior (remember be nice - even if it sickens you), and if necessary keep going up the chain of command. As such be a thorn in their side until they listen to you, if it takes calling into the bank each day till you get somewhere, then that is what you have to do. But be realistic on your suggested repayment plan, I know you probably have x amount of euro in mind as your suggested repayment, ask what is the max term they will allow the loan to be extended and see if you can meet their repayments in that way.

eagle_i

One other thing, keep records of all communications - be it letter, telephone, email or face to face meeting. Always take note of the persons name, time and date of call/meeting, even if it is just to say left message with Ms x for Ms Y to call me back. Put everything in writing, at least if run into problems you will have a record of all communications and can produce that to the 'Heavy' should it ever come to that!

Cookie_Monster

eagle_i wrote: »

Cookie, don't give up. Call into the bank, ask for the loan offical you dealt with when taking out the loan, bring the letter you sent them and their reply. Be nice and ask can they help you explore options that are avaible to you. If you are not getting joy from him/her, ask to speak to someone more senior (remember be nice - even if it sickens you), and if necessary keep going up the chain of command. As such be a thorn in their side until they listen to you, if it takes calling into the bank each day till you get somewhere, then that is what you have to do. But be realistic on your suggested repayment plan, I know you probably have x amount of euro in mind as your suggested repayment, ask what is the max term they will allow the loan to be extended and see if you can meet their repayments in that way.

already sent a complaint to the customer service people over the nature of the response.

I'm actually just going to sell the car as I'd rather be debt free at this stage to be honest, even the reduced payments would still be an annoyance I don't need. wanted to go from 3 to 4 years is all. they would have let me have a five year term initially anyway :rolleyes:

branches won't deal so far with it as its a BOI finance division car loan. I haven't dropped it as yet but am deciding if I want to just sell car or pursue it with them before doing anything.

stepbar

Cookie_Monster wrote: »

already sent a complaint to the customer service people over the nature of the response.

I'm actually just going to sell the car as I'd rather be debt free at this stage to be honest, even the reduced payments would still be an annoyance I don't need. wanted to go from 3 to 4 years is all. they would have let me have a five year term initially anyway :rolleyes:

branches won't deal so far with it as its a BOI finance division car loan. I haven't dropped it as yet but am deciding if I want to just sell car or pursue it with them before doing anything.

Try and see if you can hand back the car under the "half" rule.

Cookie_Monster

stepbar wrote: »

Try and see if you can hand back the car under the "half" rule.

car is worth way in excess (40%) of the HP value so that would be foolish on my part.