How to reduce the interest rate on a loan? Reducing interest on a loan legally

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

Today it is almost impossible to find a person who would not apply for a loan at a bank or any other financial institution. Regardless of the amount of money borrowed, many people dream of paying off the institution as quickly as possible, or at least getting a reduction in the interest rate on an existing mortgage loan or a loan for the purchase of cars, equipment and other things. Is it possible to make it official? Consider all the existing options in more detail.

Factors affecting overpayment

Before you figure out how to reduce the interest rate on a loan, you should understand the principle of overpayments. This will help answer many questions.

For example, it should be said right away that it will be quite difficult to significantly reduce the level of overpayment. The fact is that in each bank there is a minimum scale to which such a decrease is possible. Therefore, it is necessary to rationally understand that when issuing credit funds, a financial institution expects to make a profit. Based on this, no financial institution will work at a loss.

However, there are a number of certain exceptions. One of them is mortgage lending with the support of government programs. These are the most significant reasons for lowering the interest rate on a loan. In this case, the overpayment is compensated by the state. Accordingly, the bank can significantly lower the interest rate without harming itself.

Also, not everyone knows that the percentage of overpayment is regulated by the Central Bank. Therefore, there is a certain minimum threshold. However, real data that is received from a financial institution is rarely disclosed to borrowers and bank customers.

Among other things, when talking about how to reduce the interest rate on a loan, you need to understand that when applying for a loan, the bank also takes into account the money that will need to be paid to employees of departments for servicing equipment in the offices of a financial institution and so on.

The risk factors and the desired profit are also taken into account. The last item is also called the greed factor. It turns out that the possibility of lowering the rate depends on how loyal the bank is to its customers. According to statistics, we can conclude that even with the most serious approach to this issue, it is possible to lower the loan rate by no more than 3-4 points. It all depends on the specific situation.

Any bank focuses on the economic situation in the country, as well as on its own welfare. It can be concluded that it is much easier to reduce the overpayment in a financial institution that is stable. SpeechIt is about large organizations that have been operating in the country for a long time. There are also other ways to reduce the interest rate on an existing loan.

Loan early repayment

This is the easiest way to reduce your overpayment. However, this method makes sense to try to implement only if the borrower has an annuity payment and he has not yet reached the middle of the payment period. For repayment, not only personal, but also accumulative funds of customers, as well as other possible instruments, can be used. These include parent capital. In this case, it is not necessary to wait until the child is 3 years old, as the funds can be contributed to the mortgage.

Refinancing

In this case, we are talking about another loan (in the same or a third-party bank) at a lower interest rate. This is especially true for those who signed the contract at a time when the rates were especially high. For example, in 2017 interest rates on consumer loans are much lower. Accordingly, in this situation, refinancing is a fairly effective way to reduce overpayments. In other words, the borrower simply issues a new loan in the amount of the current debt. The amount remains the same, but the overpayment decreases.

New loan with different conditions

In fact, this is another kind of refinancing. In this case, not only the interest rate changes, but also other conditions under the loan contract. For example, a client may refusecompulsory insurance or change the currency of payments. However, it should be borne in mind that when you refuse insurance, interest rates, as a rule, on the contrary, increase.

Participation in special programs

In order to get a relatively cheap loan, you can consider the current social proposals from the state. For example, many banks have a Young Family campaign. In this case, interest rates may be reduced for couples in which the age of the spouses has not reached 35 years. In the event that the consumer already has an existing loan, he can apply for a reduction in the interest rate on the loan in connection with joining this program.

Also today there is a military mortgage. This category of lending was specially designed for military personnel. In order to become a member of this program, you must serve on a contract basis for at least 3 years. Then the Ministry of Defense of the country is ready to compensate interest rates in the amount of 8 to 10%.

In addition, there are programs for young employees living in rural areas. In this case, clients of financial institutions are also waiting for quite favorable conditions for reducing the interest rate on loans. For example, Rosselkhozbank has special programs, according to which customers can purchase houses outside the city, provided that the work activity will be carried out in rural areas.

By credit card

To everyoneit is known that credit cards usually charge the highest interest, which can reach up to 59% per annum. In this case, in order to reduce the overpayment, the appeal to the bank is not provided. It will also be impossible to refinance the loan. This is because credit cards are a typical personalized product of a financial institution. By and large, there are no effective methods on how to reduce the interest rate on a loan in this case. The only way to reduce the overpayment at least a little is to pre-arrange credit benefits. Or you can try to get another credit card with lower interest in the same or another bank.

How to reduce the interest rate on a loan at Sberbank

Most customers have more confidence in this credit institution. Today in this bank you can get a loan at a fairly low interest rate, which you can do even less.

First of all, you need to contact a bank branch employee and declare your intentions. To qualify for a reduction in overpayment, you must provide an ideal credit history. If previous payments were made without delay and in the entire history of lending the client had no problems with financial institutions, then the bank can meet halfway.

Also, Sberbank lowers interest rates for those who participate in salary projects. Clients do not need to provide certificates confirming income, and other documents onsolvency. If the client participates in this program, then the bank is certainly sure that all funds will be returned to him.

In addition, you can try to attract guarantors or provide property as collateral.

How to reissue a loan at Sberbank at a lower percentage

In this case, the only possible option is to conclude a new refinancing agreement. It should be noted that, starting this year, Sberbank provides preferential terms for this procedure. Therefore, it is possible to close loans from other credit institutions and draw up a new contract. This will be especially beneficial for those who have acquired high-interest loan obligations.

What you need to renew the loan

To do this, just contact any available branch of Sberbank and fill out the appropriate application. In addition to the questionnaire, you must also take with you a passport of a citizen of the Russian Federation, contracts of previous credit organizations, certificates confirming repayment and the absence of delays in payments, and a work book. If the client is a member of the social program, then it is necessary to provide a certificate of marriage and birth of children. If the borrower is a man under the age of 27, then you must bring a military ID.

When talking about how to reduce the interest rate on a loan, you need to consider that the more positive information the borrower can provide about himself, the greater his chances of reducing the creditrates and getting better credit terms.

In closing

In fact, lowering the interest rate in the bank is quite problematic. Therefore, it is better to think over the profitability of the transaction in advance even before the signing of the contract. Before signing papers, it is necessary to consider all options for mortgage or consumer loans, interest rates in 2017, and what forecasts specialists made for the next period of time. Any information would be helpful.