Processing a debt rescheduling despite poor creditworthiness can be really difficult. But it is not entirely impossible. With a debt restructuring, existing loans are replaced and combined into a new loan. This can help make installments affordable again. Borrowers also have the option of changing the amount of the loan itself, the term of the loan and, accordingly, the amount of the monthly charge. A debt rescheduling despite poor creditworthiness can either take place at the previous lender or at another bank.
The aim of the debt restructuring will be faster debt relief with the lowest possible borrowing costs. With a poor credit rating, it is of course somewhat more difficult to persuade the lender to agree to rescheduling. Foreign banks always check their creditworthiness and quickly determine if a loan applicant is not creditworthy. As a rule, they are then not willing to buy a foreseeable risk, so that inquiries regarding debt restructuring are mostly unsuccessful.
However, because there are very different reasons why someone suddenly has a bad credit rating, it is not entirely impossible to get debt restructuring approved despite a poor credit rating. These will always be individual decisions about which no general statements can be made at this point.
What options exist for debt restructuring
If the applicant has a negative Credit Bureau, a third-party bank will usually not be willing to provide a loan for debt rescheduling. Unless the loan applicant is able to provide other collateral in the form of a solvent guarantee.
Nevertheless, the possibility of debt restructuring is more likely to be with the house bank. Here the customer has the advantage that he is known, that the bank has insight into his financial situation and knows the customer’s payment behavior. However, it is also important here what should be rescheduled and why the credit rating is currently poor. The situation is extremely unfavorable if no income is currently being earned.
On the other hand, borrowers who want to reschedule ongoing mortgage financing have many better chances. These loans are usually secured in the land register. If the customer has paid his installments on time in the past, debt rescheduling is usually granted without any problems. Sometimes, however, banks also require a solvent guarantee as additional security.
The number and amount of the loans to be repaid usually also play a role in the decision. Consumers have fewer problems with Credit Bureau entries, which are due to unpaid bills from telephone or electricity providers. If negative Credit Bureau entries are already noted as done, rescheduling is also easier to obtain.
What should you watch out for when rescheduling despite poor creditworthiness?
Anyone who has opened up a particularly cheap way of financing should do everything in advance to put the negative Credit Bureau in order. If this is not so easy, the personal interview with a loan officer at the bank should be sought. Banks are often now ready to work with customers to find solutions to financial problems. After all, they themselves are interested in getting all of their borrowed money back. Borrowers should, however, avoid getting involved in securing the debt rescheduling loan as far as possible.
There is little prospect of debt restructuring despite poor creditworthiness, who have repeatedly had arrears on current loans that cannot be shown as attachable income at the time.