2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The economic crisis creates demand for such type of banking services as refinancing. The opportunity to take out a loan on more favorable terms may be of interest not only to those clients who are in a difficult financial situation. Rational borrowers see such lending as a way to save their own money.
Internal on-lending
Many banks offer internal refinancing of loans for individuals. The borrower receives a certain amount on more loyal terms, which should cover the old loan.
Financial institution renegotiates the contract with the client, which prescribes new terms and interest rates. A very convenient mechanism to reduce costs and improve the quality of life.
As a rule, the bank agrees to on-lending, if there is a real need for it. In the event of a change in financialof the client's position, the bank will agree to re-sign the loan agreement. Such a prospect is more acceptable than future litigation if the borrower fails to pay at all.
Sometimes refinancing of loans for individuals is offered to conscientious payers as a nice bonus. Reducing the rate and amount of payments can significantly ease the financial burden.
External on-lending
Not always a banking institution is ready to meet a client who needs a lower interest rate. Refinancing a mortgage loan for individuals becomes possible only when applying to another organization.
The borrower is not required to inform the lender of its intention to refinance. The client has every right to do so.
If it is difficult to choose the right bank, you should use the services of a broker. He will help you apply to different institutions, select the optimal conditions for payment. Of course, such brokerage assistance is not free. The consultant will have to pay from 1% to 10% of the requested amount. Not very cost-effective, but in some situations a specialist can be of real help.
Required documents
Refinancing of loans from other banks to individuals sometimes takes place according to a simplified scheme. After all, at one time another bank had already made a positive decision on the loan, and financial employees have reason to trust this opinion. The client will need a previousloan agreement, all payment receipts, identification documents and income statement.
It should be borne in mind that a tarnished credit history, lack of a permanent job and delinquency on a previous loan can become a serious obstacle to a positive resolution of the issue.
On-lending terms
Each banking organization puts forward its own conditions for refinancing a loan for individuals. But they all have common features. You can start the procedure after at least 3 months from the date of taking the loan. During this time, no delays should be allowed. The amount of the debt exceeds 50,000 rubles, and at least 7 months are left before the end of the payment. Applicant must be no older than 65-75 by the end of the payout.
Also, you must additionally present a certificate of the amount of debt. As a rule, this document is provided free of charge at any credit institution.
If a guarantor is involved, a complete list of documents will also be required from him.
Therefore, do not confuse refinancing of a personal loan with restructuring. The latter is carried out in the conditions of the inability of the client to pay the monthly payment and requires a significant reduction in the amounts payable. On-lending is a rational decision taken by the borrower in order to reduce the financial burden on their own budget.
How is the process?
Having decided on the bank in which therefinancing a loan by an individual, all necessary documents are collected. After that, an application is submitted, which the institution considers within a few days. In case of a positive decision, the client either receives cash in hand, or the money is transferred to the account of the old lender.
After the procedure is completed, the borrower undertakes to fully fulfill all obligations under the contract on time.
Merging several loans into one (credit against credit)
It happens that an individual has several existing loans in banks or MFIs. A very dangerous situation for the financial condition, since it is likely that after a while there will simply be nothing to pay such a number of loans.
Some banks offer programs that allow you to combine all these loans into one large loan with a minimum interest rate. It is better not to delay the decision and apply for refinancing as soon as possible. This will save you from numerous pen alties that will inevitably arise in case of the slightest delay.
Will Sberbank help?
Individuals can refinance loans at Sberbank by submitting an appropriate application to the local branch. This financial institution offers a solution to financial problems in several areas: on-lending consumer and housing loans, removing debt on a debit card with an overdraft. Clients get the opportunity not only to reduce the interest rate, but alsoif necessary, take your car out of encumbrance. A service is also offered to combine several loans into one big loan.
The bank determines the cost of a future loan individually, it can range from 17% to 29% of the amount. It is possible to repay such a loan in an annuity way (equal payments).
To refinance loans at Sberbank, individuals must fill out an application form, which contains all personal data. It is necessary to indicate the address of registration and actual residence (if they differ), telephone numbers for communication, data on the composition of the family. Information is also provided on the presence or absence of property, income level and seniority.
Loan conditions at Sberbank
The on-lending program of this organization specifies that the loan term can be from 3 to 60 months. You can receive cash in the amount of up to 1,000,000 rubles. The age of the potential client must not be less than 21 years old and not more than 65 years old by the end of the loan repayment period.
The loan is provided to all residents of the Russian Federation who have submitted an application and meet the requirements of Sberbank. Cash withdrawal is made within 30 calendar days from the date of a positive decision on the application. Repayment is made in equal monthly installments.
What does the Bank of Moscow offer?
Any citizen of the Russian Federation can use the services of this large financial organization. The Bank of Moscow refinances loans under certain conditions.
Reduce the size of the credit rate with subsequent debt relief can anyone in need. The bank offers amounts ranging from 100,000 to 3,000,000 rubles. The size of the bet is determined on an individual basis. If the loan is within 450,000 rubles, then lending is at 18.5% per year. The maximum bet is 21.9%. The borrower has the right to choose the term for which the loan is issued. It must be between 6 and 60 months.
The refinancing procedure at the Bank of Moscow is quite simple. The client applies to the local branch with a statement. You can fill out a form or apply on the official website of the company. When making a positive decision, the manager makes an appointment with the client and tells you what documents you need to take with you.
The Bank of Moscow is refinancing loans to individuals with several existing loans. In this case, it is necessary to prepare a complete set of documents for each of the loans. The client can request an amount in excess of the amount of the existing debt, and use the balance for his own purposes.
Cons of the procedure
Before contacting the appropriate institution, you should know that refinancing loans from other banks to individuals carries some negative aspects.
Among them you cannote the additional costs, the occurrence of a possible significant overpayment and the need to draw up a new insurance product. You will have to face another paperwork that takes time and effort.
Reviews on refinancing loans to individuals vary. They are united only by the fact that the clients, who approached the issue with all responsibility, were satisfied with the result.
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