Renegotiated Loan Definition
A loan in which the owed balance is paid back on condition different from the terms stated in the original contract. The lender and the borrower can modify a loan if the borrower is unable to pay the agreed monthly amounts due to his or her reduced financial capability. This may be good for both the lender and the borrower, because they are able to avoid bankruptcy of the borrower; thus the borrower can retain the asset financed by the loan and the lender can still get the money back.