What Is a Rollover Loan?

Loan extension is a loan that cannot be repaid at maturity. It is approved to extend the repayment period. Repayment of loans when they are due is a credit principle that companies must abide by, and it is also a prerequisite for banks to accelerate the turnover of credit funds. If the company encounters special circumstances and really cannot repay the loan on time, it should submit an application to explain the situation. After the bank's review and approval, the repayment time can be extended, but renewal procedures are required, otherwise it will be treated as an overdue loan. ^[1]

Loan rollover

The borrower has temporary difficulties in capital turnover during the loan period. As a result, the principal of the loan cannot be repaid on time, and the conditions for renewal are met. Generally, the renewal application is applied to the loan bank 30 working days in advance.

The loan extension must not be lower than the original loan conditions: the short-term loan extension cannot exceed the original loan term; the medium-term loan extension cannot exceed

When applying for the renewal of a guaranteed loan, a written proof of the loan guarantor's consent to the renewal and continued guarantee shall be issued. The loan extension must not be lower than the original loan conditions.

Whether the loan is extended is up to the lender. When applying for a guaranteed loan with a mortgage loan or a pledged loan renewal, the guarantor, mortgagor, and pledgor shall also issue a written certificate of consent. If there is an agreement, it shall be implemented according to the agreement.

The cumulative rollover period of short-term loans (within one year, including one year) must not exceed the original loan term; the cumulative rollover period of medium-term loans (more than one year, less than five years, including five years) must not exceed half of the original loan term; long-term loans (Over five years) The cumulative extension period shall not exceed three years. Except where otherwise provided by the state. If the borrower does not apply for extension or the application is not approved, the loan will be transferred to the overdue loan account from the day after the maturity date.