With development banking sector In the country, the number of people who apply for a loan is growing every day. It helps to decide financial difficulties get an education or buy your own home. But due to the deteriorating economic situation, many borrowers are beginning to experience financial difficulties, which gradually lead to late payments. Refinancing loans from other banks helps not only to avoid financial problems and a critical situation with a debt hole, but also to reduce loan interest.
In this article, we will consider the peculiarity of the refinancing procedure and find out where which banks offer such a service today.
According to statistics, today almost every tenth client who has issued a loan applies for the refinancing service. This large figure indicates the relevance of this banking instrument and makes you pay attention to it.
Refinancing is bank instrument, which allows you to get new loan to pay off the old one. In what cases do people turn to such a program and how profitable is it?
In fact, refinancing (or refinancing) is a new loan that is taken to pay off current debt. Banks today are increasingly beginning to develop such programs that, on the one hand, help clients solve their financial difficulties, and on the other, attract new borrowers.
For whom is it more beneficial and does the refinancing procedure reduce the cost of repaying a loan?
There are 2 types of refinancing:
- external (the current debt is closed by another bank);
- internal (occurs within one bank).
How does refinancing work?
Of course, the procedure for refinancing a loan is not carried out by the bank out of good intentions.
At the expense of conscientious clients who are looking for ways out of a difficult situation, banks increase their base and replenish their loan portfolio. Before approving an application for on-lending, any bank will be This is a very important criterion for selecting clients. Not a single organization will pay a loan for which the client has already formed overdue payments, or there have been past dues in the past.
This is checked fairly quickly. Even if at the time of applying to another bank, the borrower has no current debt, this does not guarantee the approval of the application.
The late payment could have been several months ago, which reduced credit rating client and reduced his chances of approval of the application.
It should be understood that all information about issued loans, loan amounts, schedules and repayment terms is stored in the Unified Bureau of Credit Histories.
The Russian Bureau of Credit Histories (abbreviated as RBKI) is an organization created to systematize the credit histories of all borrowers for banks, leasing and insurance companies, credit cooperatives and organizations. RBKI has the most complete and up-to-date information on all clients, which is constantly added and updated.
Before applying to another bank for a refinancing service, it will not be superfluous to find out your credit rating in this Bureau and assess the chances in advance. The fact is that each refusal of another bank is also recorded in your history. In the future, the chances of getting a new loan will decrease even more, because the bank will see that you have repeatedly been refused by other financial institutions.
What is the point of a bank going to such a financial risk and conclude an agreement with a client who may become a potential defaulter?
Does this mean that having once compromised his impeccable credit reputation, the client can no longer count on regular loans?
Of course, each bank independently determines for itself the algorithm for filtering customers with "bad" credit history. A client who has taken 100,000 rubles from a bank and stopped repayment already in the fourth month will not be on a par with a borrower who repays a loan in a disciplined manner for several years and only a few times made a late payment.
How does the refinancing process work?
The scheme is quite simple and understandable.
- The client collects a package of documents for a new loan, fills out an application for refinancing and applies to Bank No. 2.
- Bank No. 2 (to which the client applies) considers the application and makes a decision.
- With a positive decision, Bank No. 2 pays the entire debt to Bank No. 1 (in which the client has a current loan). In this case, the client is obliged to notify Bank No. 1 of his decision to repay the loan ahead of schedule. The consent of the Lender in this case is not required, but, according to the terms of the agreement, the client is obliged to notify about his decision in advance (the specific period is indicated in the agreement). Bank Specialist No. 1 must issue a certificate that reflects the amount until the full repayment of the loan on the current date.
- On the day of the transaction, the client signs a new agreement with Bank No. 2. Bank No. 1 issues to the borrower a certificate of full repayment of the loan. The borrower shows this certificate to Bank No. 2 in order to confirm intended use money under the refinancing program.
Thus, the borrower has the opportunity, on more benign terms, to start a repayment program for Bank No. 2 (which completed the refinancing procedure).
When considering your application at a new bank, analysts will carefully check loan delinquency and income documents. It will be possible to take a new loan to cover the existing debt only if there are no delinquencies.
What loans are eligible for refinancing?
Several types of loans are subject to refinancing:
- mortgage;
- auto lending;
- targeted loans (goods);
- cash loan.
The special feasibility of refinancing are credit programs with a maturity of more than three years. This makes it possible to significantly facilitate the debt repayment scheme. In the case of a mortgage, when the loan term is several decades, a decrease in the interest rate even by 0.5% -1% will significantly affect the final amount.
It also makes sense to resort to this service if the borrower has collected several loan products, With different charts repayment. One big loan, issued in another bank, you can immediately pay off several products (card, mortgage, consumer loan). At the same time, you can even win on the interest rate.
Why does a borrower need refinancing?
In order to understand the purpose and features of refinancing, let's see what the borrower needs it for? Financial experts note several factors that lead clients to the decision to refinance.
The client can apply for the on-lending service to the bank in three cases:
Sometimes the impulsiveness of signing a contract, without the desire to delve into the subtleties, numbers and hidden fees causes the client to take financial obligations who either cannot fulfill it after a while, or realizes that he received a loan on unfavorable terms. As a result, after a short time, the borrower realizes the severity of the loan burden and his inability to pay.
Not everyone manages to get a loan on favorable terms, and sometimes the realization of this fact comes after a few months. You cannot terminate the loan agreement, but you can change its conditions.
Of course, not a single bank will agree to change the current terms of the contract, offering a lower interest rate. In this case, the refinancing procedure will help.
For some clients, this is the only possible chance to improve their financial situation without ruining their credit history and not being on the bench of “penalties”.
When is the best time to refinance?
In what situations is it advisable for a client to apply for the on-lending service to another bank?
- it is necessary to reduce the financial burden and increase the loan term;
- the desire to change the currency under the contract;
- better interest rates at another bank;
- it is necessary to remove the arrest from the pledged property;
- change in the payment schedule scheme (from annuity to a differentiated scheme);
- consolidation of credit products.
Let's now consider the feasibility of each case for refinancing.
- Reducing the interest rate.
As for more favorable conditions and a reduced interest rate from another bank, then you need to be very careful here. According to financial experts, it makes sense to refinance by other banks under more favorable conditions only when the interest rate is at least 2% lower.
In other cases, a new loan agreement may seem like a lifeline only at first glance. In fact, he will drag you even deeper into financial problems or take away a large number of time, nerves, and in fact, will not reduce the financial burden.
You should not resort to the refinancing procedure if there are several months left before the payment of the full debt, since the amount of time that will have to be spent on the execution of a new transaction will not pay off with a reward in the interest rate difference.
If we are talking about a long period of the contract (for example, a mortgage loan), then lowering the rate even by 1% will significantly save.
Therefore, having such a loan from a bank, it will not be superfluous to periodically find out the terms of lending in other financial institutions.
- Extending the loan term.
As for a significant increase in the loan term in order to reduce the financial burden, one should be very careful here.
This type of refinancing was in great demand at the end of the 2000s, when the dollar rose sharply and many borrowers were on the verge of a “financial collapse”.
It is advisable to resort to this option if there is an unstable financial situation on the market, the exchange rate increases, and the borrower receives the main income in rubles. Financial experts, in principle, recommend taking out a loan in the currency in which the client receives the main income.
When applying for a refinancing service, it should be understood that another bank will refinance at the current rate, which will automatically increase the loan amount. But on the other hand, it will help stabilize the situation and avoid trouble with late payments in the future.
The difference between refinancing and restructuring a loan
The main purpose of loan restructuring is to change the terms of the agreement, the purpose of which is to reduce the financial burden. In fact, the contract is not closed, but its terms are changed. Extension of the term loan agreement reduces the amount of the monthly payment, so that the borrower is able to gradually pay off the debt.
Unlike refinancing, restructuring is carried out by the same bank in which the borrower has a loan and, as a rule, a change in conditions is not associated with a change in the interest rate.
Some confuse refinancing with restructuring, which actually means reissuing a current loan to a softer one for the client.
By agreeing to this procedure, the bank is coming for certain concessions to the client, who in this moment is in trouble financial position and cannot fulfill its financial obligations under the contract. But at the same time, the benefit of the bank is quite obvious.
Firstly, the term of the contract increases, which means that the bank will receive a large profit on paying commissions and interest.
And secondly, the client will gradually pay off the entire debt instead of the case going to court.
What do you need to refinance?
Registration of the service provides for the provision of a full package of documents, as in the case of standard loans.
To take a new loan, you will need the following package of documents:
- passport;
- identification code;
- documents of guarantors (if any are specified in the contract);
- copy work book;
- income statement ((2NDFL);
- loan agreement (current);
- completed application for refinancing;
- receipts for payment of the current loan;
- certificate from the bank on the current debt.
In addition to this standard package, some banks may require additional documents.
The situation with the refinancing of loans in Russian banks very different. Some banks provide on-lending loans to their own customers. Other financial institutions offer to refinance loans issued by other companies.
In what case can a credit institution refuse? If, when considering all documents and checking credit history, the bank doubts solvency.
What to look for before signing a contract?
Before applying to another bank for a refinancing service, you need to study the following points:
Step-by-step instructions for obtaining refinancing
Advantages and disadvantages of refinancing loans from other banks
Today, many customers have already used the refinancing service of other banks, having appreciated the benefits of this product.
Pros:
- the possibility of changing the interest rate to a more favorable one;
- the possibility of removing an unbearable financial burden by increasing the term of the loan agreement;
- you can get an amount sufficient to repay the mortgage, in order to withdraw the collateral from arrest;
- consolidation of several loans;
- changing the structure of the repayment schedule (transition from an annuity to a differentiated scheme).
- the possibility of changing the main currency under the contract.
But, despite the visible advantages of the refinancing procedure, it is impossible not to note some disadvantages.
Minuses:
- the procedure will require the re-collection of documents, which entails a loss of time;
- many banks charge additional fees;
- additional expenses (notary, legal advice, etc.)
- the terms of the new loan agreement may impose more stringent requirements on the borrower.
Which banks provide refinancing?
Carries out the procedure for refinancing legal and individuals, offering on-lending programs for auto loans, cash, cards, consumer loans.
Refinancing amount consumer credit- up to 1,000,000 rubles.
Interest rate - 13.9%
Term - up to 5 years.
Special conditions: the term of the current contract is at least 6 months. At least 3 months before closing the contract.
The loan amount is not less than 200 thousand rubles.
Interest rate - up to 15%
Term - up to 7 years.
Special conditions: the possibility of closing up to three current loans with one loan. The term of the current contract is at least 6 months. At least 3 months before closing the contract.
The application is considered up to 5 business days.
- Bank VTB 24
The maximum loan amount is 3 million rubles.
Interest rate - 15%.
Term - up to 5 years.
The requirement for the client is official employment, 18-65 years old.
Special conditions: the possibility of closing up to 6 loans with one loan.
VTB Bank has 100% approval of refinancing applications if the borrower has not missed the loan repayment date in the last 12 months.
The application is considered up to 4 working days.
Refinancing amount - up to. The Bank does not provide on-lending for foreign currency loans.
Interest rate - from 16.5 to 25%. The interest rate depends on the amount.
Term - from 1 to 7 years.
The requirement for the client is official employment, 21-65 years old.
Special conditions: experience at the last place of work - at least 6 months. A prerequisite is an ideal credit history and the absence of overdue payments for the last 12 months.
The application is considered up to 4 working days.
Rosselkhozbank
Carries out the procedure for refinancing legal entities and individuals in rubles and foreign currency, offering on-lending programs for car loans, cash, cards, consumer loans.
The amount of consumer loan refinancing is from 100 thousand rubles to 1,000,000 rubles.
Interest rate - from 13.5 to 15%
The term is from 1 to 5 years.
For on-lending over 500 thousand rubles, a Guarantor (individual) is required.
The requirement for the client is 23-65 years old, 2-personal income tax or 3-personal income tax.
Special conditions: the minimum balance of the debt is not less than 10 thousand rubles, a pledge of liquid property is required. The loan approval rate is above average, but this organization should not have a bad credit history.
Please note that all banks set a minimum and maximum bar credit interest. It depends on many factors: the amount of the loan, the term, the category of the borrower. Therefore, when choosing the most profitable refinancing program for yourself, ask the manager to calculate your personal rate during the consultation, based on the real state of affairs.
Alfa-Bank works mainly with large loans (cars, mortgages). Because of long term lending, they represent the greatest attraction for the bank. Approval of the application will depend on the remaining loan term, the amount of debt.
The amount of loan refinancing is from 600 thousand rubles.
Interest rate - from 13.5.
Term - up to 5 years.
Home Credit Bank.
This bank is especially loyal to customers, even those who have overdue payments.
The maximum loan amount is up to 500,000 rubles.
Interest rate - 19.9% (the same for all borrowers).
Term - up to 60 months.
The requirement for the client is official employment, 21-65 years old.
Application processing time is up to 5 business days.
Almost any loan can be closed with a new loan (auto lending, mortgage, credit card).
It is impossible to unequivocally answer the question in which of the banks it is more profitable to refinance a loan. It all depends on the amount of outstanding debt and the type of loan.
For example, with a mortgage, it is better to go to Alfa-Bank or Sberbank of Russia. And a cash or consumer loan can be closed with the help of banks such as VTB24, Russian Agricultural Bank, Home Credit.
Video. Mortgage refinancing
Conclusion
Refinancing is a fairly profitable and relevant service that allows you to get new loan to pay off the old one. At the same time, the terms of the new loan agreement may be more forgiving. If the borrower has financial difficulties that do not allow repaying the current debt in the usual rhythm, then this service can help avoid late payments. It will also help keep your credit history positive.
According to financial experts, withdraw from financial crisis only a new loan will help, annual rate which will be at least 2% lower than the existing one. In other cases, the refinancing service may seem like a lifeline only at first glance. In fact, it will drag even deeper into debt hole or just take time.
Modern resources allow you to independently monitor bank offers, comparing refinancing programs and choosing the most optimal one for yourself.
Video. Who will benefit from refinancing?
Previously taken loans must be repaid (read the article about what will happen if you do not pay for the loan :). But it is far from always possible to foresee the future and be sure that it will be possible to return the money on time.
If difficult circumstances arise, then in order to prevent the deterioration of their own credit history, the borrower must resort to the procedure for refinancing the loan. (Remember that it is extremely difficult).
Can I refinance a loan at another bank?
Refinancing a loan or, in other words, refinancing is expressed in obtaining a new loan to pay off the old one (partial or full) on more favorable terms. As a result, the borrower eases his monthly financial burden. Such a procedure can be carried out both in the financial institution in which the loan was previously issued, and in another. In the first case, the procedure is called restructuring. (You can learn more about this).
Scheme for on-lending borrowers through another financial institution as follows:
An individual draws up a loan at another bank, which, in turn, pays the body of the loan and interest in the old one, transferring the amount of debt there. And the borrower enters into an agreement with a new creditor and becomes his debtor.
The new loan may exceed the amount owed by the old creditor bank. The borrower has the right to spend the difference at his own discretion and receive it in cash or on a card.
If the previously taken loan is collateral, then the procedure for re-registration of the collateral to another bank is carried out. Often, while the collateral is registered with another financial institution, for example, under a mortgage, new bank establishes an increased interest on the loan, because the loan during this period of time is unsecured. After the end of the re-registration procedure, the interest rate is reduced. (All about refinancing secured by real estate)
Important!Refinancing is target loan and in case of detection of misuse of funds, the financial institution that carried out the refinancing procedure has the right not only to demand its money back, but also to impose a financial penalty (penalty or fine) on the borrower.
This rule also applies to those banks that confirm refinancing in.
Which loan cannot be refinanced?
Various financial institutions offer refinancing of loans received from other banks. For example, VTB 24 takes on the repayment of debt obligations of borrowers on mortgage loans, provides on-lending on car loans, and Yupiastrub Bank offers refinancing on unsecured debts and cards by issuing new plastic.
But not every loan taken earlier can be re-credited in another bank. The obstacle is the requirements for the loan and the borrower, which were presented when applying for a loan in the old bank and provided for by the refinancing program in the new one. For example, if a previously signed agreement does not provide for early repayment of the debt, then refinancing will be impossible.
The main reasons for refusing to refinance are the presence of delays and a bad credit history of the borrower.
Documents for refinancing a consumer loan
Most financial institutions require individuals package of documents, which contains:
- Passport of a citizen of the Russian Federation, in which there is a mandatory registration mark. If the registration is temporary, then the borrower will be required to present a certificate confirming it;
- Identification code;
- Certificate of income for 6 months or a similar document confirming the solvency of a potential client;
- Certificate of the quality of service and the amount of debt (the old creditor should not have any delays);
- Loan agreement, as well as pledge and guarantee (if any). If there is collateral, a new assessment is made;
- Employment history;
- Documents on the presence of children and marriage.
To refinance a loan entity will have to provide a package of documents of the following content:
- All constituent documents of the company;
- Information about the movement of funds on the current account;
- Collateral agreements and credit obligations;
- Certificate of quality of service and amount of debt.
During the procedure refinancing loans with the involvement of microfinance organizations, the package of submitted documents is significantly reduced. In most cases, such a financial institution only requires a passport of a citizen of the Russian Federation and its code, reserving the right to require a certificate of income (the period displayed in the certificate varies depending on the requirements of the company).
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Where to start on-lending - what documents are needed to refinance a loan?
Many have heard about refinancing a loan. Some borrowers managed to use this service of banks to slightly reduce the financial burden. As the popularity of refinancing services grows, the number of those wishing to take advantage of this opportunity is growing. New clients have a reasonable question - what is needed to refinance a loan?
What to provide to banks - a standard package of documents
The main objective of refinancing is to reduce the interest rate on a loan. Thanks to this procedure, it is possible to reissue an existing loan agreement on more favorable terms. As a result, the client receives a convenient payment schedule with smaller amounts to be paid. The term of the contract may increase, and it is also possible to change the bank to a more convenient one at the location. At the same time, the service practically does not differ from the standard procedure for obtaining a loan. But there are some nuances.
The package of documents for obtaining refinancing can be called standard. Documents are required that help confirm the identity of the borrower, his solvency. The list of documents to confirm the identity of the creditor is as follows:
- Passport of the creditor or a photocopy of all pages of the passport that have marks. Some banks ask for without fail provide the original document to verify identity.
- Individual taxpayer number.
- Military ID.
- A copy of the work book, certified by the employer.
- Insurance number.
- Driver's license if available.
- Foreign passport if available.
Of all the documents listed, only a passport and an identification code are mandatory. Other documents are required not from all clients and not in all banks. Some banking institutions go for on-lending for clients even without the need to confirm the applicant's employment. True, in this case, the lending conditions are not very pleasant and it will not be possible to receive a large amount without confirmation of solvency.
In addition to identity documents, the bank will require other documents:
- Help to confirm income from the accounting department at the place of work.
- Debit card statement.
- Documents that help to form an impression of the client's income level for consideration of an application for a large loan. These can be certificates of pension accrual, lease agreements or other documents confirming the constant inflow of funds from the client.
This is a standard package of documents that banks require from a client when requesting a loan refinancing. In addition to this package, other papers may be needed:
- certificate of credit, for which refinancing is carried out. The bank asks to show a certificate of debt and credit conditions for the loan that is planned to be repaid with new borrowed funds;
- certificate confirming the absence of current debt on the loan. As well as information about the timing of receipt of payments to the account;
- details of the current account, which is opened in the bank to repay the loan.
Also, the applicant will need a certificate for refinancing the loan, a sample of which will be provided by an employee of the bank in which the refinancing is carried out.
How to properly refinance - instructions
contact commercial Bank with a request to refinance the loan the borrower can at any stage. You can apply at any operating bank if he offers his clients the service of on-lending. If necessary, you can refinance both one loan and several at once, moreover, issued in different banks. For conscientious payers with a good credit history, banks quickly approve the possibility of obtaining refinancing. Thanks to a new loan, it is possible to close old loan and get new terms of payments at more favorable interest rates.
The loan refinancing scheme is simple - first, the borrower needs to study the conditions for on-lending at the selected bank. They are not always pleasantly pleasing, so in some cases it makes no sense to carry out the on-lending procedure due to the lack of benefits. After the client is convinced of the existence of loyal conditions, he must clarify which package of documents requires given bank. Collecting and filing papers usually takes a minimum of time, especially since many banks today are trying to simplify the requirements as much as possible in order to attract new customers. The fewer documents a borrower has to collect, the faster he decides to apply for a loan. Some lenders are not intimidated even a little more high interest compared with the conditions of those loans, for which you need to bring a huge package of documents to confirm your identity, ability to work and income level.
The bank examines the documents and makes a decision. Today it is not necessary to wait for the bank's verdict for a long time. Many banking institutions try to give an answer literally within a few hours. If the decision is positive, the client is invited to sign the documents.
The instruction of action when reissuing a loan with collateral looks a little more complicated. With a small amount on the balance, refinancing occurs quickly, the bank repays the old loan, and the client's property is released from collateral. If the amount of the new loan is large, the bank may require the re-registration of collateral. And these are additional costs for paperwork, as well as time costs. In addition, while the collateral is on the balance sheet of another bank, the client will have to pay an increased interest rate on the new loan, as this loan will be considered unsecured. It is most advantageous to receive refinancing of a loan with collateral in the same bank where the loan was issued. After all, this saves time and money that will be spent on re-registration collateral. But banks rarely provide such a service. Other banks are more willing to lend, despite the fact that the refinancing procedure within one organization follows a simplified scheme.
What you need to get refinancing - the main conditions for on-lending
In order to get a loan from another bank, certain conditions must be met. Conditions may vary depending on banking institution, but the basic requirements usually stipulate the same:
- Absence of debt on an existing loan or loans. This condition is set by banks first. No one wants to deal with problem borrowers and overdue loans. True, if there is a slight delay, minor deviations from the payment schedule, this information usually does not affect the general impression of the creditor if all the necessary payments have been made at the current time.
- Refinancing is carried out only for loans for which there were payments for at least 3-6 months. Newly issued loans are not subject to refinancing.
- Some restrictions are noted on terms of crediting. For example, if it is necessary to refinance a loan, the term of which is equal to the maximum possible term for obtaining a loan from a new bank, in this case it is impossible to extend the terms of the agreement. Save at similar situation succeeds only at a lower interest rate, stipulated by the terms of refinancing. Otherwise, it will not be possible to achieve a noticeable reduction in the amount of the loan payment.
Otherwise, the conditions for on-lending do not differ from the conditions for issuing conventional loans. Clients only need to carefully study the contract and compare its terms with the old contract. This will help to calculate the approximate percentage of benefits. Experts note that if the benefit from refinancing does not exceed 2%, it makes no sense to engage in on-lending. You also need to find in the old contract a clause on the possibility of early repayment of the existing loan. Some banks stipulate penalties for early repayment funds, which also makes the refinancing service unprofitable. In this situation, the client can contact his bank with a request to revise the terms of the loan. But such a procedure already has the name "restructuring of credit debt."
Recently, the economic situation in the country is unstable. However, the improvement is for the better. This can be seen from the declining interest rates on some loans. On average, over the past few years, the refinancing rate Central Bank decreased by 2 times. And the interest rates of the rest depend on it. credit institutions.
Refinancing is carried out by the same credit organizations that issue loans and borrowings. These include banks and microfinance institutions. Each of them can install its own package of documents.
But there are standard papers, without which consideration of an application for refinancing will not take place in any bank. These documents include:
- directly the application itself for the implementation of debt refinancing, indicating the remaining amount on the loan and the desired refinancing period;
- passport of a citizen of the Russian Federation;
- previously concluded loan agreement;
- certificate of the residual amount of the debt at the time of applying for refinancing;
- a certificate indicating the details of the account where it is necessary to enroll cash to pay off debt;
- a copy of the mortgage, if the lender has a pledge issued by the borrower;
- proof of stable income.
You can verify your income with a statement from salary card, if it is opened in the bank where the application is submitted. In addition, the employer must, at the request of the employee, issue a 2-NDFL certificate, which reflects all accrued income for a certain period of time.
Also, many banks allow the opportunity to fill out a form in the form of a bank, which will indicate the income of the borrower, confirmed by the seal of the organization in which he works, as well as the signature of the head.
Russian practice
In Russia, there are many citizens who issued several years ago mortgage loans under 14 and even 18 percent per annum. And in 2019, banks offer these same loans at 6-10 percent per annum. And in order for all citizens to be in the same conditions, banks offer to refinance the remaining debt under more low interest. At the same time, it is possible to refinance the loan not only in the same bank, but also in many others.
In addition, refinancing helps not only to reduce the interest rate for those who have it too high. There are citizens whose incomes have declined significantly over the past few years, while expenses have increased due to the constant increase in the cost of goods. So pay fixed amount it was hard for them to get a loan. They can apply to refinance this loan. In this case, the loan term will be revised. For example, if a citizen had to pay 3 years for 10 thousand rubles, then after refinancing the loan term will increase to 5 years, but monthly payment will be 6 or 7 thousand rubles.
In addition, it often happens that a citizen has several loans taken for different purposes at different annual interest rates. In this case, they can all be combined into one. Then it will be possible to save on overpaid interest on some loans, and you can also get convenience in payment.
Thus, in Russia at the present time refinancing has become very popular and has become one of the most popular banking services.
concept
Under general concept refinancing is understood as the replacement of an existing issued debt obligation for a new commitment. In this case, the circumstances of this replacement are established by the participants on the basis of market conditions. But the main thing is that the procedure and conditions for refinancing should be significantly better than those provided before. If this procedure occurs on extremely unfavorable terms for the borrower, then it is recognized as debt restructuring.
Also, banks often provide an opportunity not only to refinance your loan, but also to receive an amount that exceeds the amount total debt. In this case, you may need:
- provision of additional collateral;
- participation of guarantors or co-borrowers;
- additional insurance of existing risks.
When registering a pledge, a mortgage is signed, which is stored in the bank, and is also registered without fail if real estate is the pledge.
In the case of the participation of guarantors, they will need a passport and documents confirming income. The same requirements apply to guarantors as to borrowers.
Primary requirements
Almost all banks have certain requirements for their borrowers. If a citizen does not meet one or more parameters, he will be given a refusal. The main requirements include:
- The presence of Russian citizenship and permanent registration. If a citizen has a temporary residence permit, then refinancing can only be approved for the duration of the temporary registration.
- Borrower's age of majority. At the same time, many credit institutions do not give large sums loans to citizens under the age of 23, due to the fact that they may be full-time students.
- The presence of a permanent job or permanent stable income from entrepreneurial activity.
- For pensioners, a critical age limit is set, after which loans are not issued.
- The presence of overdue debts and cases of late payment of the loan will automatically refuse to issue a loan.
- Availability enforcement proceedings at bailiffs on debts to third parties will also give a refusal to refinance.
Taking into account all these requirements and circumstances, citizens should measure their chances of refinancing a loan and using it if the bank offers more favorable conditions than they have.
Advantages and disadvantages
Of course, the main point of refinancing is to provide more favorable conditions for the borrower when replacing one debt obligation with another. But rarely in what cases the bank refuses to miss its benefits. Therefore, even before concluding an agreement with the bank, it is necessary to clarify everything additional terms. In most cases, clients are faced with the following:
- when applying for refinancing, the bank may require an additional fee for this service, while this amount may be even more than the difference in interest on the refinanced loan;
- additional payment for work with registration of a pledge on certain property;
- application fee.
It is important to balance the costs of the proposed mandatory paid services with the proposed refinancing benefit. If it is absent, then there is no point in signing such an agreement. In this case, it is better to contact other banks and find out what conditions they offer.
The obvious advantages include the following:
- the ability to reduce the interest rate on an existing loan and overpay a smaller amount for using the bank's money;
- the ability to combine several loans into one, which will provide the convenience of a one-time payment, and you can also benefit from taking into account the average interest on the loan;
- opportunity to reduce monthly amount payment by increasing the term of the loan;
- the opportunity to receive additional funds in excess of the existing amount of debt without obtaining a second loan.
All these pluses really are a good basis for considering the possibility of refinancing existing debt. But before signing the contract, it is important to study the offers of the main competitive banks and choose the most profitable one for yourself. In addition, it is necessary to take into account additional imposed services in this case. It is important to remember that if the legislation does not establish an obligation in this service (for example, in insurance), the borrower has the right to refuse. A bank cannot refuse to issue a loan for this reason.
Decided to refinance and make the loan more profitable? We have prepared this material especially for you. We recommend that you carefully read the information provided.
Remember that each bank sets its own requirements, but in general they are similar. Let's see what documents are needed for refinancing.
Standard package of documents:
You need to submit documents proving your identity and solvency to the bank. Their list is quite standard:
- Application for a loan with filling in the data in the form of a credit institution;
- Passport of a citizen of the Russian Federation;
- A document confirming the availability of income (personal income tax certificate-2, tax return And so on);
- It is advisable to attach a copy of the employment record or employment contract.
Since the borrower indicates “for refinancing” in the “purpose” column of the loan application form, you also need to examine the loan that you intend to partially or fully repay.
These materials will be helpful:
It is also worth specifying the situation with the temporary registration of the borrower. In this case, a loan to refinance existing loans can be provided to the borrower only for the duration of the registration.
Additional required documents
The borrower must inform the potential lender which loans he intends to fully and partially close and their status at the current time. To do this, you need to submit the following documents to the bank:
- a copy of the loan agreement with a payment schedule or a certificate from the bank, which details the main parameters of the loan (the certificate must be drawn up by a bank employee, certified by signature and seal);
- a certificate from the bank indicating the exact amount of debt on the loan, indicating loan debt and the amount of accrued interest on the date of issue of the document;
- a certificate indicating the details of the account opened to repay the loan;
- if the loan provides for a pledge, then a copy of the mortgage must be enclosed in the package of documents.
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Some banks, such as Sberbank, allow you to combine up to 5 loans into one. That is, you must submit the above documents for each of the loans you have.
Refinancing in excess of debt on loans
If you want to not only merge existing loans into single loan or reduce the monthly loan burden, but also get additional funds, you should take care of providing collateral and / or the presence of guarantors. They are also subject to verification:
- the pledge is accompanied by property documents;
- guarantors must provide passports and documents confirming their income and its volume.
Features of refinancing
Each of the credit institutions has its own requirements for loans, which potential borrower wants to refinance. For example, Sberbank undertakes to refinance loans that work for at least six months, and their validity period ends no earlier than three months.
You must understand that you should not have delinquencies on loans. Also, a borrower counting on refinancing should not hope that he will receive the money in his hands. All calculations will be carried out by bank employees, and you will only have to make monthly payments in full.
