Funding options with reasonable terms can be difficult to pay off for some, but financing with bad terms can seem almost impossible to pay off. However, there are ways to change the terms from unfavorable to favorable, making it easier for you to pay them back in the long run. The main two ways to do this are:
Loan modification is the process of adjusting the terms of an existing loan that you currently have. It is normally done to alter aspects of the loan such as the time in which it must be paid off, the interest rate of the loan, and sometimes even modifying the loan into a different type of loan altogether.
With a loan modification, you will remain with the same lender, but the two of you will work to change the terms of your loan. A lender will normally participate in a loan modification if the borrower is unable to repay the loan under the existing terms.
If you wish to modify your existing loan but are having trouble doing so, seek out assistance. Plenty of government-sponsored and independent professionals are out there waiting to help you modify your loan into one that is far more manageable for you in the long run.
Loan modification can potentially hurt your credit score, so make sure to discuss this with your lender before modifying the terms of your loan. While it may not seem like a big deal, even a slight dip to your credit score could have potentially far-reaching consequences to you and your business.
When a loan is refinanced, you simply replace your current loan with a new one that has different terms. You can refinance your loan if you wish to lengthen or shorten your terms, get a lower interest rate, or even change your loan type. Refinancing a loan often improves the terms for the borrower and is normally done when current interest rates have fallen. This allows borrowers to have a new loan with far better terms.
To refinance your loan, you will have to go through an application process similar to the one you went through to receive your loan in the first place. If you choose to refinance a loan, it does not have to be with your current lender. If you wish, you can switch over to a new lender. If your current lender is giving you issues, definitely consider switching.
Knowing whether you should refinance or modify your loan can be difficult to figure out. With professional assistance, you can determine not only if changing the terms of your loan is an option, but also if you would be better suited to modify or refinance your loan.
For help determining if you should modify or refinance your current loan, contact us today.
Together, we can make sure that your financial product has the best possible terms for you and your situation.
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