Some citizens face difficulties repaying their bank loans. This can be caused by a reduction in salary, a decrease in workload, or other financial problems. People who took out loans relying on their previous income later face difficulties making payments. In such situations, some turn to banks asking for a reduction in monthly payments or a temporary freeze on the loan. However, banks do not always accept such requests.
So what can citizens whose income has decreased and who cannot repay their loan debt do? Is it possible to ask a bank to reduce loan payments or suspend them for a certain period? If the bank refuses, which authority should the citizen apply to?
Speaking to Globalinfo.az, Doctor of Philosophy in Economic Sciences Gunay Huseynova said that, except in cases related to health and other essential needs, taking out a loan is not recommended:
“If a person has no additional source of income and takes out a long-term, large loan relying solely on their salary, this creates a fairly high risk. When applying for a loan, a citizen should have savings sufficient to cover at least six months of expenses. This is especially important for continuing loan payments in the event of unexpected financial difficulties.”
Gunay Huseynova
The economist noted that non-payment or delay of loan debt creates risks not only for the citizen but also for the banks:
“Such cases can affect banks’ liquidity, the fulfillment of deposit obligations, the growth of risky loans, and even the payment of employees’ salaries. When a bank refuses to grant relief, citizens sometimes see the solution in turning to usurers, pawnshops, or non-bank credit organizations (NBCOs). This, in turn, further increases their financial burden.
As for citizens whose income has decreased or who are having difficulty repaying their loan debt, it is possible to extend the loan term and reduce the monthly payment amount by agreement with the bank. However, these matters are regulated according to the banks’ internal rules. Whether a request is accepted or rejected depends on the bank’s decision. Suspending loan payments for a certain period is almost never possible. If the bank does not satisfy the request, the citizen should try to resolve the issue through the courts. However, it is impossible to predict in advance which side the court will rule in favor of. The decision will depend on the circumstances of the case and the evidence presented.”
Leman Imran
Globalinfo.az
