Refinancing of MFIs with delays: procedure, conditions, features, reviews

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

MFIs impose lower requirements on future borrowers when receiving amounts up to 50 thousand rubles. However, this is offset by short lending terms - from 7 to 30 days, as well as a high rate of up to 2% per day. Unlike banks, MFIs do not require a lot of paperwork to get a loan, especially for small amounts.

As a result of several loans taken from microfinance institutions and a high daily interest rate, a person may fall into a debt hole caused by the inability to repay the resulting debt on time. The consequences of such an action are sad. Often, debts with overdue payments of more than 90–120 days end up in collection agencies, or they are transferred in the form of a lawsuit to the court to collect a set amount through bailiffs.

A self-lending person cannot solve financial problems, so there are two ways out of this difficult economic situation. The first is the judicial decision of the issue. This is either the seizure of property with its subsequent sale,or registration of bankruptcy, if the amount of debts in the aggregate is more than 500 thousand rubles. It is possible to avoid such legal consequences. To do this, there are debt refinancing programs that are provided by various financial institutions. This method allows not only to quickly close existing debts, but also to choose a rate for a single loan amount that can be paid monthly.

Refinancing of debts in MFIs appeared relatively recently. Previously, banks offered similar services to close debts on consumer, auto or mortgage loans.

When refinancing may be required

In order not to bring the case to trial with the possible loss of personal property, both movable and immovable, you should not accumulate debt. If there are difficulties in the early stages of repaying the loan, it is worth considering the option of debt restructuring.

Refinancing loans in MFIs will avoid the accumulation of debts. However, when choosing this method, it is worth considering all the nuances, from assessing your solvency to choosing the organization itself that will deal with debt restructuring.

Difficulties borrowers may face

Refinancing in MFIs with delinquencies without collateral is a risky operation for any financial institution. This is due to the fact that a person is applying who has already allowed the omission of payments for 1 or more months. Banks and other financial institutions, issuing loans, calculate the solvency of customers.

There are situations in which you will have to increase your income and officially declare it according to the established forms of documents (2-personal income tax) in order to increase the chances of approval of such a financial procedure.

The main problem is that microcredit companies are loyal to citizens who are not officially employed. If you have to apply for debt restructuring to the bank, then there is a high probability of being refused, since employees will have to obtain legal proof of income.

Main steps for refinancing

Refinancing loans in MFIs with delinquency requires a number of actions from the debtor. You should not expect that this procedure will be as fast as the issuance of the loan itself. Now, when applying for restructuring, employees of a financial institution will more carefully check a person for his solvency, as well as responsibility.

To increase the chances of approval, you can use a guarantee. This slightly increases the chances that the microcredit company or bank will approve the refinancing decision. It is important that a person has a small but stable monthly income. If there is no work and income is not declared, it will be impossible to get an extension.

Therefore, when contacting a bank, you should think about the guarantor in the person of the next of kin and the availability of official employment.

Where to contact

Refinancing in MFIs remotely is possible, but only at initialstages. If the amount of debt is small, up to 15-20 thousand rubles, then it will be possible to use the service via the Internet, without a personal visit to the office of a credit institution.

There are 3 main options where overdue debt is refinanced:

1. In the microcredit organization where the debt was formed.
2. At another microfinance institution.
3. In the bank.

Each of the listed institutions has its own conditions for the provision of this service. It is important to familiarize yourself with all the conditions before applying and check whether the borrower complies with them at the time of application.

In MFIs with indebtedness

Refinancing in MFIs with delinquencies without collateral is the most common option. It will be successful even if the client has already applied for a loan more than once and paid it on time. Then the company's employees themselves can offer to restructure the debt on more favorable terms.

Often, microcredit companies offer their clients the opportunity to repay debts for a longer period. If a loan was taken for 7-14 days, it can be extended for up to 2 months. Added to this condition is a freeze on interest rates. This means that the client will be required to pay the resulting debt on time without accruing daily interest.

The decision on this is made by the employees of the microfinance organization. Therefore, it is important to address the early stages of arrears. This will allow you to quickly resolve theproblem with the payment of the loan.

To another microfinance institution

Refinancing in MFIs without collateral is also offered by other market participants. They do this to expand their customer base. However, there may be difficulties associated with the conditions for closing the old debt and issuing a new loan.

Conditions in this case may practically not differ. Formally, the borrower will repay the old debt, but immediately he will have a new one, on the same conditions that were before. In this case, there is a risk of falling back into a position where income will not be enough to pay off payments. At the same time, it should be understood that the terms of such lending are also limited.

To close a new debt, the creditor will have no more than 30 days. It is worth applying for restructuring only if the income allows you to close the debt on time.

To the bank

Refinancing of MFIs in a bank is possible only if the citizen has an official income. It is worth noting that such financial structures are strictly related to debtors. Therefore, if there are overdue loans for a period of more than 90–120 days, it is not worth restructuring the debt for approval from the bank's specialists.

However, there are programs aimed also at attracting new customers. Before applying, you should visit the official websites of banks and study the types of loans offered, as well as the conditions for obtaining them. It should be noted that such programs are not often introduced and are promotions to attractnew borrowers.

Refinancing procedure

All actions of the borrower must be phased in order to obtain a positive decision on debt restructuring. It is important to highlight the main points when contacting financial institutions:

1. Get a certificate in the form of 2-personal income tax with confirmation of real monthly income. If the employment is not official, you will have to fix it.
2. To increase your chances of being approved for refinancing, seek help from friends or relatives to become guarantors.
3. Assess all your financial risks. The rate after refinancing will be lower, but this does not relieve the borrower of responsibility in the form of repayment of new debt.
4. View all available offers in the region where the borrower is located.

In Moscow, refinancing in MFIs with delays is a popular service. Therefore, it is provided not only by microcredit organizations or banks themselves, but also by other legal entities that, under the terms of a loan agreement, assume obligations to pay off overdue debts of the applicant. After that, a new debt is formed, but already to the company itself, and the amount of monthly payments is set.

Basic requirements for borrowers

Refinancing debts in MFIs is a serious financial operation. Therefore, it has a statutory legal design. It is important that the borrower fits all the requirements. Otherwise, the debt restructuring will be denied.

Assessing the existing conditions in the refinancing and lending market, we can single out the main points from the established requirements:

• the age of the person being credited is over 21;
• presence of official employment;
• income not lower than the subsistence minimum established in the region;
• presence of guarantors, in case there are risks of non-payment of the loan after its restructuring.

In addition, the MFI or the bank may put forward additional requirements for the client. It is also necessary to provide contact details from the official place of work, so that when applying, security service specialists check the data specified in the questionnaire and the 2-NDFL certificate for compliance.

When they can refuse

In MFIs, refinancing with delays also has established limits. Basically, microcredit companies do not provide restructuring if the debt exceeds more than 100 thousand rubles. This is due to the fact that the rate is calculated not for a month, but for a day. As a result, the amount of new debt will only increase, and it will take several years to repay it.

The second reason for refusal is due to missing payment for more than 90 days. Credit institutions usually transfer such debts to collection agencies or send them to the court to collect a loan through bailiffs. It is possible to get a prolongation with a long period of overdue debt only in the MFI where this loan was taken.

False information provided in the application form when applying for refinancing can also lead todebt restructuring may be denied. It is worth specifying only reliable data.

What are the risks of debt refinancing

Refinancing microloans in MFIs helps to get rid of old debts, but at the same time, the borrower has another responsibility in the form of a loan with a new interest rate. It is important to calculate whether there is enough money to meet the monthly set payments.

All overdue payments for more than 10 days are noted in the client's credit history. With a new application to a microfinance company or bank, specialists will receive an extract from the NBKI and check how responsible the person was when paying off the previous debt.

What points are important to pay attention to

In MFIs, refinancing can be done online in your personal account. Some microcredit organizations offer this opportunity to their regular customers. Therefore, when forming a debt, it is worth checking with the company's specialists whether it is possible to freeze the calculation of interest or ask to increase the loan term.

You should not take loans from other microfinance organizations, even if they have received approval, when the amount of the monthly payment is much higher than the financial capabilities of the borrower. This can lead to even more debt. Banks, as a rule, take into account the solvency of the client and give loans only if he spends no more than 40-50% of his income on them. But microcredit companies often neglect such calculations.

Summarizingresults

In MFIs, refinancing can be provided at early stages and for small amounts. It is important to understand that you can get refinancing from a bank if there were no delinquencies on loans. To do this, you need to calculate your financial risks in advance.

If there is a possibility that at the end of the month the required amount will not be collected to repay the microcredit, you should contact the bank to get a loan for any purpose or a credit card. This will close the debt to the MFI and reduce the percentage of the monthly payment. An improved credit history will also be a bonus.