Refinancing — a loan to repay other loans
Even the most conscientious borrowers may have difficulty with mortgage payments. One solution to this problem is refinancing (refinancing). In this article, we will discuss the nuances of refinanceloan debts to determine, as from the apex to extract the maximum benefit.
will the Bank to meet you, giving credit to the repayment of the loan to another financial institution? Currently, most banks don’t care what the money will be used, issued by the consumer credit programs. Credit managers do not even ask you what the money is going. In this case, the procedure of getting a loan will not differ from the receipt of previous loans.
Russia has developed programs to refinance loans. They represent special offers banking, in which the purpose of obtaining money is a repayment of previously taken credit. Using such programs, you can get a lower interest rate.
Refinancing is the full or partial repayment of the loan by attracting new loan.
as a result, you will be able to either reduce the interest, or to facilitate monthly financial burden (to reduce the amount of the required payment by stretching the loan term).
If you look at how similar problems are solved in the West, we should highlight the service of consolidation loans. It, basically, people enjoy paying on a car loan. mortgage, multiple credit cards, etc. using the services of consolidation the person does not have to run to different agencies with many small contributions, he pays only monthly fee of only one organization.
so, the loan to repay the previous loans is a very real possibility. Let’s try to understand why it is needed at all and what can be squeezed out of this process.
Why take out a new loan
For refinancing usually turn in the following cases:
- In the absence of the borrower the ability to make monthly payments due to the resulting financial difficulties.
- If there is a desire to reduce the overpayment on the loan and save on interest.
let us Consider both the situation in more detail.
no money to pay.
In the first case, when the monthly payment is unaffordable for the borrower, by attracting new loan, you can: «miss» one of the months of payments and to reduce the size of the following payments. But there is one minus — the growth of the total amount of the overpayment .
This is generally bad practice. Using this method of debt Yama man becomes deeper. But, when no other option, this option may be the only correct one.
saving on the overpayment.
This case is much more interesting. For example, you last took an expensive loan, but only then realized that on the market there are more attractive interest rates, and not to use them would be wrong. In addition, it will be useful to implement something like the above consolidation loans, but their own: if you have several small consumer loans, they can be turned into one with the help of lending to turn them into one (with refinancing auto loans and refinancing mortgages is somewhat more complicated, as will be discussed in separate articles).
In this case would require careful calculate. You should answer the following questions: what amount of money will be optimal as a new loan, how long it take and what percentage will be most beneficial for you?
currently, banks provide funds for the repayment of other loans for various conditions, among which we should highlight two main:
- tools for the existing loan made by the borrower in a timely manner;
- available in the loan agreement, there is no restriction of early redemption.
the rest of the refinancing options have little difference from regular loan. The customer must have a regular income — if you have the software, you re-execute in favor of the new lender. But in the case of Deposit have a little splurge: assessment and notarization. This means that should initially to compare the costs with the expected benefits from refinancing.
Refinancing loan delinquency
There are two options:
- to find the means to pay all arrears and apply for lending to another Bank.
- to Make the loan secured by the property (apartment or machines ).
Possible frustrations and pitfalls
the Borrower does not get on hand cash
If the Bank decides in your favor, then most likely you are on the hands of money will not get at all, they will be transferred to the account of the previous creditor. You will only have the new lender and new payment schedule, though with more comfortable conditions of repayment of the debt.
When refinancing still have one more chance to earn the money in the case, if the amount is approved by the credit Committee, exceeds your debt on the first loan. This can occur if you initially requested more money, and your financial situation and credit history safe and trusted.
Banks, not borrowers wanting to let go «on the side», can find a way to spoil their lives. And this despite the fact that the law prohibited to impose penalties for early repayment of loans. Without resorting to illegal methods, and «adhering to the code of corporate solidarity, credit managers will not be easy to contact the credit taken for a short time, or until the end which has less than six months. from which it follows that the interest savings will not work.
Remember that the «don’t tell the Bank the whole truth is not a crime, unless you have false documents. The practice of lending in our country is that money is still given to dubious borrowers, but the most interesting thing here is that the rate of return in these cases is quite large. Citizens often «personenauto to periodate»yourself in a difficult situation: not to by fraud to appropriate money, and to make financial stranglehold» is a little weaker during the search of additional income.
whatever the reasons and ways to refinance the loan, they will benefit only if your actions are not spontaneous, and well considered. Therefore, processing a loan of a considerable sum, and for a long time, for example, a mortgage, try at this stage to estimate what may be the conditions of lending. While the payment process, try not to skip payments, putting the debt service above other family needs.
Refinancing legal entities
Refinancing legal entities became relevant only in recent years, after the reduction of the refinancing rate of the Central Bank of the Russian Federation. followed by a declining trend rates on loans in other banks. Using refinancing PIS will be able to improve credit conditions, saving financial resources needed for business development. Unfortunately, in our country, yet there is no convenient mechanism refinancing legal persons. But in conditions of high competition on the credit market should accelerate the emergence of different mechanisms and options that entrepreneurs will be able to use.
article Summary: Monthly mortgage payments have become unmanageable for you, and you decide on a new loan. In any cases, it is advisable to do? How to use refinancing to save the situation, not aggravate it even more? where can I get a loan