How to get a loan from a bank with no undesirable outcomes

Suppose you have determined the purpose of the loan and, in your view, it is justified. You have chosen a bank and a specific loan offer. The next step should be to assess your financial situation and ability to make payments.

Ask yourself: “Will I be able to make my loan payments if I suddenly lose my job or become ill?” You should rely only on a stable source of income and plan for the future. Your monthly payments on credit obligations should not exceed half of your income. This will give you a reasonable level of confidence that you will be able to repay the loan on time.

Remember that failure to repay a loan may result in the bank reporting the non-fulfillment of your obligations to credit bureaus, and this information will be reflected in your credit history. If the loan is secured by collateral, the debtor's property may be sold through a pre-trial procedure or through court proceedings. In addition, the creditor may issue a payment demand to debit funds from a bank account without additional consent, and the debtor may be temporarily restricted from travelling abroad.

Procedure for Settling Overdue Debt:

• Notification from the bank: If you fall behind on your loan payments, the bank or microfinance organization must notify you of the overdue debt within 10 calendar days from the date it arises.
• Borrower's application: The borrower has the right, within 30 calendar days from the date the overdue payment arises, to submit a written application to the credit organization (or through the bank's/MFO's official digital services) requesting restructuring of the loan. The application must state the reason for failure to fulfill the obligations and propose the borrower's options for repayment. Documents confirming the deterioration of the borrower's financial situation (for example, proof of job loss or reduced income) must also be attached. Failure to provide the requested documents may be grounds for leaving the application without consideration.
• Consideration of the application: The bank or MFO must consider the application and provide an official response within 15 calendar days:
  1. agree to the proposed changes to the terms of the agreement;
  2. provide its own counterproposals for changing the terms;
  3. refuse the request, providing a reasoned explanation for the refusal.

Under the legislation, changes to the terms of a loan agreement may include reducing the interest rate, deferring payments, changing the repayment method or term, writing off overdue debt or penalties, as well as allowing the borrower to independently sell the collateral.

Applying to an Ombudsman: If the borrower is unable to reach an agreement with the creditor on the terms of restructuring, or if the creditor has failed to carry out the mandatory debt-settlement procedures, the borrower may, within 15 calendar days from the date of receiving the creditor's decision, apply to the banking or microfinance ombudsman.

Attention! The borrower must attach evidence that they previously contacted the credit organization and were unable to reach a mutually acceptable solution. Remember that a loan is a major responsibility, and seeking debt settlement promptly can help protect your interests and minimize financial risks.