1, risk control. In order to control risks, banks need to make scientific and reasonable arrangements for the term, interest rate and repayment method of loans. If the loan term is extended without repayment, it may increase the risk of the bank, because the borrower's credit status and repayment ability may change, leading to an increase in repayment risk.
2. Cost of capital. Banks need to consume a lot of money to provide loans, and the cost of capital is usually related to time. If the non-repayment renewal period exceeds the original loan period, the bank needs to provide the borrower with longer financial support, which may increase the bank's capital cost.
3. Legal provisions. Some countries and regions may have relevant laws and regulations, which require that the outstanding term of the loan shall not exceed the term of the original loan. This is to protect the interests of borrowers, prevent banks from extending the loan period by not repaying loans, and increase the repayment burden of borrowers.