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Recently, we shared an update on the existing functionality of how we reflect schedule extensions lending companies give to borrowers. It was followed by an additional update on how we reflect the borrowers repayments schedule extensions that are due to governments across the world implementing moratoriums, imposing lending companies to give borrowers more time to repay their loans.
After both updates, we received various questions from investors to be clarified.
At the moment, Mintos reflects two possible types of extensions provided by lending companies:
1. Extensions which are initiated by the borrower and approved by the lending company according to the terms of the loan agreement. While each lending company has its own repayment schedule extension policy according to the market and type of issued loan, what we reflect on Mintos is the total number of days by which a loan is extended. The reflected maximum number of extension periods is 6, and the usual amount of days per extension period is 31. Including possible prolongations of late loans, the total number of possible extensions days is 180.
There are cases when some lending companies, according to their extensions policy with borrowers, might offer borrowers only one extension for a longer period of time – for example, 45 days. In such a case, investors will see a single extension for 45 days reflected in the loan repayment schedule.
As per each lending company extensions policy, it is also possible to extend late loans. For example, if the loan is 60 days late, the lending company can extend it for up to additional 60 days. Technically on Mintos marketplace, such a case will be reflected as an extension for 120 days.
When extensions are initiated by the borrower, interest is always accrued for all investing period.
2. Extensions which are stipulated by various government-imposed moratoriums. On top of the pre-agreed loan repayments schedule extensions between the lending company and borrowers, due to COVID-19 and the current economic downturn, loans can be prolonged due to moratoriums. The extension period depends on the specific requirements of the moratorium and varies from country to country. Important note: not all countries are implementing moratorium imposed requirements.
We have put in place a risk mitigation process to ensure that loan extensions reflected on Mintos are there only due to above-mentioned reasons. Whenever an extension has occurred, the lending company shares the respective information with Mintos.
Our cooperation agreements with lending companies explicitly stipulate that information shared with Mintos must reflect the information that is current and true about the borrower’s loan. Providing incorrect information to Mintos is a breach of contract, and would potentially lead to legal actions and might involve a claim against a lending company to compensate for all damage done.
If Mintos notices an extension that was made not in accordance with the process mentioned above, we are requesting additional information from the lending company. If an investor with active investment in the particular extended loan does not wish to continue to invest after the extension was made, we advise contacting Mintos Investor Services team.