A loan modification is a written document that shows an agreement between the borrower and the lender .The loan modification shows that a change has been made on the original terms of the promissory notes. In this document the borrower and the lender seal the new changes that had occurred on the original terms. Loan modification is a critical process that when it is not coordinated well and analyzed in details can cause even more problems in the future. The main aim of the loan modification is to make a loan more affordable. An individual usually signs an agreement with their lenders with a hope that they will be able to finance the loans. However, a situation sometimes occurs that the individuals are unable to service these loans as per the original agreement. When an individual finds himself in such a situation, it is prudent that they seek a way out to help them service the loans but in an affordable way.
In Worcester Bankruptcy, the loan modification comes with many options. An individual has a variety of options to consider before settling down to a particular one. The first option is lowering of the interest rates. The interest rate is the main factor that contributes to the huge amounts one has to pay. High interest rate drains an individual and makes the loans hard to service. The law therefore gives a provision of such a request to modify the loan through the lowering of the interest rates. Another way that the loans can be modified in Worcester is by lengthening the payment time. The lenders might not be willing to reduce or to lower the interest rate. When this occurs you can be sure that there is another option. The individual can request for the lengthening of the payment period. Say, the original agreement stated seven years; the current modification can lengthen the payment period up to 8 years depending on the comfort ability of the individual. One can also request for the reduction of the principal balance, although most of the lenders would strongly reject the reduction of the principal balance.