What is refinancing

To get acquainted with the concept of "refinancing" will be useful for all those who could not master the loan payment. This procedure involves taking an additional loan in order to reimburse the principal amount. Sometimes this is the only decision to pay the bank money and not resort to the help of small credit organizations that offer high interest and unfavorable refund periods.

1

Definancial Definancing

Under refinancing implies a financial operation that allows you to take a new loan to cover the old one. The feature of this process is that the conditions in this case are much more profitable: the interest is less, and the return time is optimally chosen.

Refinancing is worth it if:

1. It is necessary to repay the debt, and the means for this lack.
2. Reduce loan payments thanks to a lower percentage of a new loan.
3. There are several loans at the same time (up to five pieces).

Such a dedication helps to avoid fines, which the Bank has the right to impose on a negligent client. The main goal is to reduce the financial pressure on the borrower, give him the opportunity to cope with the main payment and repay the subsequent loan.

Two types of refinancing distinguish:

1. Official through a bank institution. The client appeals to the financial organization to conclude a new contract on more favorable and satisfied. To do this, the bank can be selected where the initial loan was taken, or a new institution. In order for this procedure to be effective, it is necessary to achieve a decrease in rates at least 2.5%.
2. The hidden, under which the credit takes place without explanation of the difficult financial condition of the client. This is the same loan, as well as the first, and therefore no concerns in the interest rate and the terms will not be repayment.

The first option is most preferred because it has favorable conditions and do not have to hide its intentions from the bank.

The second option is also complicated by the fact that the re-credit should have some pledge under him. Usually real estate acts in his role. Also, the Bank will definitely require a certificate of income and, if the situation is disappointing, will prescribe a medium or high percentage of payments.

2

Refinancing procedure

To obtain the possibility of obtaining funds, you need to follow this algorithm:

1. Contact the bank, which issued an initial loan. The conditions for the refinancing in this case will be as simple as possible and beneficial. Sometimes it is enough to simply make a request in which to describe the reasons for the predicament and ask to reduce the interest rate.
2. Analysis of the credit history of the client. If he already has overdue payments, then the likelihood will be minimal.
3. If you need to refinance in another bank, then first you need to take a certificate of an outstanding amount, interest rate and provide all credit history on this loan.

It is important to pay attention to the fact that the interest rate is fixed and the bank and did not raise it after the dedication.

3

Situations for unambiguous "no"

The bank has the right to refuse to the Client in carrying out this procedure. There are a number of reasons for it. One of these includes short-term loans. Their minimum repayment period does not allow them to restruct them. Extremely rare such situations still happen due to the ideal history of payments and exemplary credit reputation of the client.

It is also impossible to refinance part of the loan, only its entirely. Customers made in the "black" lists of banks as malicious defaulters will not receive.

The tabs are also subject to loans taken in foreign currency.

These are standard rules inherent in almost every bank. But sometimes it happens that the institution complements the list of its terms. The poet is important to familiarize yourself with the information on the official website of the bank or from his representatives.

4

Is everything so smooth?

Refinancing It seems an excellent opportunity to pay off a problem loan. But is everything so flawless? In order not to be deceived, you need to know several "pitfalls" of this procedure:

1. The need to decorate insurance for the money received. Additional costs in the form of notary services may be inappropriate.
2. Mandatory guarantee, if it comes to taking a large amount.
3. Lack of opportunity to pay off debt ahead of time.

To make a final decision, you need to calculate in detail, the costs of design, monthly payments and the final amount of payment. It is also important to know which penalties are possible when delaying payments and early repayment.

Refinancing is beneficial to conduct a bank. He gets guarantees that the loan will be paid.

Such an event may be the last hope to pay the primary debt. The elementality of the procedure and not rationality allows you to choose refinancing more and more.