Reduced payments
A creditor can be asked to renegotiate the contract that has been made so that a client can afford the payments. There are three main ways in which payments can be reduced.
•Ask the creditor to reduce interest/charges, either for a period of time (eg, the next year) or for the rest of the loan, even if interest has already been added to the amount payable over the whole period of the loan.
•Ask the creditor to agree to reduce or write off the interest/charges that have already accrued on the loan so that the future payments are affordable by the client.
•Ask the creditor to allow repayments to extend over a longer period, thereby reducing the capital portion of the repayments. There must be sufficient equity to allow this – the amount of equity can be calculated by deducting the total amount of all loans secured on the property from the market value of the property.