During uncertain times such as the COVID-19 crisis, managing your finances can feel overwhelming. You or a family member may have experienced a layoff, or your business may be quickly losing revenue. No matter the case, your bills and debt may have become unmanageable, and you need to find a solution as soon as possible.
When your income is no longer high enough to make ends meet, you may take out a large loan to cover things like mortgages, hospital bills, and substantial expenses. If the loan has high payments or interest, you may fall behind, resulting in late fees and negative marks on your credit report.
Fortunately, you are not without options. Did you know you can apply for a loan modification? You may be able to negotiate new payment terms with your loan company, and lenders may be more flexible than usual due to the COVID-19 pandemic.
Modifying your loan, however, may not be easy without professional assistance. Whether you need to negotiate the interest rate, extend the terms, or find another way to lower your monthly payment, we urge you to get into contact with our team so we can help you build the negotiation strategy you need.
Finding the Right Loan Modification Strategy for You
Not every lender will offer the same type of modification, but most are motivated to work with borrowers because it is a more cost-effective method of collecting debt. Before negotiating with your creditor, you will need to familiarize yourself with your options and analyze the potential results.
A loan modification may involve:
- Lowering the interest rate. Even just a quarter of a percent can make a difference, especially with higher loans.
- Extending the terms. If you extend your terms by 5-10 years, you may significantly reduce your monthly payments. You may, however, end up paying more interest in the long run.
- Reducing the principal. This is the most difficult modification to obtain, and you may need to pay taxes on any amount forgiven. That said, it can provide substantial relief for certain borrowers.
- Forbearance. This is a temporary payment suspension. You will still be responsible for the payments you miss, but your lender may allow you to postpone them if you’re in between jobs or facing unexpected medical expenses.
These are just a few of the options you may have when modifying a loan, and we can help you determine which path is best for you. If necessary, we can negotiate on your behalf for the outcome you need.
Banks can turn down your request for many different reasons, but you can often file an appeal within 2 weeks of the original loan modification application. You can only appeal once, so retaining guidance in this situation is critical.
Contact Us Today to Get Started
If you're looking to modify existing loan terms, we can answer your questions, help you understand your options, and guide you through the entire process. We have more than 45 years of experience helping individuals and businesses overcome financial adversity, and we want to put that experience to work for your future.