Personal Loan Restructure Procedure?

I have a personal loan in arrears the last 2 years due to a drastic change in my working circumstances/salary. (self-employed)

I have been making agreed lower payments (first 40% than 60%) in that time and the bank were good enough to stop the interest for the first 8 months of that period too.

However it has come to a head now as the bank have started charging me interest surcharge too. The total of the interest and interest surcharges applied is more than my current repayments so something has got to be done. (last 3 months made €900 in payments, charged €980 in interest)

I spoke to them again today and they want me to restructure. This will be a new loan taken out to clear the balance of the current loan plus arrears. The repayments on my new loan will be in line with my current agreed lower payments. No more interest surcharges. All looks good.

I have one worry though- My ICB report as per normal shows the last 24 months history of this loan. There is no tick in any of the 24 monthly boxes as full payment wasn't made. Instead there is a number denoting the number of months of arrears. That's fine, thats the way it operates.

When this old bad loan is paid off with my new restructured loan it will stay on my ICB report for 6 years showing 1. It was paid off in full and 2. The last 24 months were in arrears. I'm told by someone who knows (in that industry) that I have little chance of any credit with this on my report.

Things are starting to look up workwise and I know I'd have a great chance of getting the original loan in shape and getting the arrears paid off in a period of well less than 6 years if things continue. I told the bank this and asked them for another 9 months continuing with the lower repayments and interest but without the interest surcharges. They are adamant on the restructure now though.

As anybody else been in this position with a restructure?

Is there anyway of resolving this without drawing down a new loan?

I'd appreciate any input from anyone with experience on this.

One more point relating to this but in the bigger scheme of things.

If all restructures are done in this way and presuming there are lot of restructures going on...are the banks presenting these new loans drawn down to pay off bad loans as positive lending statistics or new credit??

I know there has been some doubt over the new credit statistics being released by banks. Are restructures responsible for a lot of that?

Thats just an observation I might add!! I'm not having a go at my bank, they've been fair enough with me over this loan

Yes these restructures are presented as new lending.
I was restructured last year by BOI. It hasn't been the worst experience ever.
Re your ICB record, an angle I heard of this year is to get the bank to clear up your ICB record just before you clear your loan. They have the power to straighten it up to the best of my knowledge.

Thanks RichinSpirit. Did you check if your old loan is still on ICB?
I asked them about clearing up the ICB record but they said they are unable. They said they can only request ICB to change it if they (the bank) had made a mistake

Regardless of what you do now the ICB is still going to show the arrears on the loan even when it is cleared until such time as it falls off the ICB.

Dannyboy2013, perhaps the restructure is not the worst case. If you pay off the loan in full with a new loan today, the 6 year countdown for it to be removed starts today. If you choose not to restructure and continue paying the old loan and succeed in clearing it in say two years time, the 6 year countdown for it to be removed from your ICB report starts in two years time. So instead of it on your report for six more years you'd have it on your report for eight more years.

The six year countdown starts from the point you clear the loan.

The bank won't be removing or hiding the record on the ICB database, they could add explanatory comments.