Azerbaijan.US
Borrowers who face difficulties repaying a loan often seek to extend its term in order to reduce monthly payments. However, such extensions are not automatic and depend on several conditions, financial experts say.
According to economist Akram Hasanov, banks consider loan term extensions on a case-by-case basis, taking into account the borrower’s financial situation, payment history, and overall risk profile. While extending a loan – for example, from one year to two – can lower monthly payments, not every borrower qualifies for such adjustments.
Hasanov noted that common reasons for requesting an extension include delayed salaries, changes in income schedules, temporary financial setbacks, or other documented circumstances that prevent timely repayment. In such cases, borrowers are expected to inform the bank in advance rather than wait for a missed payment.
If the bank agrees to the request, the new terms are formalized through an additional agreement signed by both parties. Without the bank’s consent, extending the loan term is not possible.
In some situations, banks may also offer additional relief measures, such as reducing accrued interest, waiving late fees or penalties, or proposing other restructuring options. All such decisions are made within the framework of national banking regulations and Central Bank guidelines.
According to the expert, banks are generally focused on ensuring that loans are eventually repaid in full, rather than pushing borrowers into default. For this reason, requests for loan extensions or restructuring are reviewed individually, with outcomes depending on the borrower’s specific circumstances.
