8 out of 10 applications - approved!

The service allows you to choose the most suitable bank for you and increase the chances of your application being approved!

Decision on the application within a couple of hours!

No queues and trips to the bank

You simply fill out the form and wait for a call from the bank employees, being at home, visiting or even in a cafe!

A modern citizen of Russia cannot do without loans. This is due to the unstable financial situation in the country. Only representatives of a small part of the population can say that they have never taken a loan from a bank, the rest know how to do it and what it is in practice. At the same time, almost every third person is unable to repay the loan.

The current situation prompted banks to create such a service as refinancing loans. In fact, such a service came to us from the west. Refinancing is designed to help the borrower repay the loan by getting a new one from another bank. The service is beneficial for both parties to the loan agreement.

What does loan refinancing mean? How does it happen?

Good to know!
Refinancing consumer loans other banks occurs by issuing as a loan for more favorable conditions cash that is used to pay off existing debt. They cannot be used for other purposes, as a report is provided to the new creditor.

With the help of on-lending, the repayment of a mortgage, car loan or a loan for personal needs, issued in another bank, is repaid. How does this happen? By performing a series of actions in a specific sequence.

The refinancing service can be used for:

Consolidation of several loans from other banks into one;
obtaining other, more favorable credit conditions;
extension of the loan term;
reducing the load on family budget;
prevent the formation of delinquency on the existing loan.

A feature of the refinancing service is its intended use. How does this happen? The borrower is obliged to use the received cash exclusively for early repayment open loan in another bank.

Be careful!
Loan refinancing is often identified with the restructuring procedure. But this is not true. When restructuring occurs, a loan is issued in the same bank, and not in another. But this happens on other, more favorable terms.

Consider what is refinancing a loan from another bank, in simple words and how it works in an example. A man took out a mortgage loan a couple of years ago at 15% per annum. With the help of refinancing, the rate is reduced to 12% per annum. Thanks to this, there is a saving of 20 to 50 thousand rubles a year. The exact amount depends on the size of the loan and the term of the loan in another bank.

Note!
The purpose of refinancing is to get a lower interest rate, increase the loan repayment term and reduce the monthly payments on a loan from another bank.

Advantages and disadvantages of refinancing

The positive aspect of refinancing is a unique chance to reduce the interest rate that was set in another bank. In addition, the borrower can count on extending the loan repayment period, due to which the monthly payment is reduced.

However, despite the benefits of refinancing, a number of negative points can be identified, such as:

It is necessary to re-assemble a set of documents for another bank. This comes at a cost of time and effort;
Additional costs occur, such as commissions and fees insurance policy;
It is possible that when applying for a service at another bank, you will need to provide a deposit.

True, if everything happens correctly, then all of the above shortcomings will not be so noticeable. And if we are talking about the ability to keep your credit history clean and not get into debt hole, then any negative aspects of refinancing will not outweigh the benefits. Moreover, Russian banks are constantly improving their services. To date, there are already more than 10 banks in which on-lending takes place in an international format.

Who needs to refinance a loan from another bank?

Today, the service of refinancing loans from other banks is a salvation for those whose financial situation no longer allows them to fulfill their loan obligations. Also, sometimes there is an illegal change in the terms of the loan agreement by the lender, which makes it impossible to use the loan on favorable terms.

Thus, refinancing loans is a profitable solution for those who:

1. Wants to reduce the amount of monthly payments on a loan from another bank. For example, a person did not apply for a loan on the most favorable terms, and later found more suitable ones. The bank in which the first loan was issued is unlikely to agree to change its conditions to others. And due to the procedure for refinancing a consumer loan in another bank, the problem is solved.

2. Wants to increase the amount of the loan. As an example, a person took out a mortgage loan and bought a property. After he repaid about half of the loan, he decided to make repairs in the acquired property, but the lender refused to expand credit limit. Along with this, another bank agrees to refinance the loan with an active balance, which is enough for repairs.

3. Wants to avoid delays due to financial difficulties.

Be careful!
Banks will refuse to refinance a loan from another bank to a person who cannot prove his solvency.

How is the refinancing of consumer loans of other banks?

Before you start applying for on-lending at another bank, you need to recalculate your own income. This is required in order to be sure of your solvency.

The decision of the credit commission in another, new bank depends on the amount of income. Under the terms of refinancing, the borrower must work from 3 to 6 months, and also have a steady income. If wage is below the average level, then the applicant for the service in another bank will have to look for a guarantor.

Refinancing consumer loans from another bank takes place in several stages:

Determining the amount of refinancing;
Applying to another bank - to a new lender;
Obtaining an extract from a former lender;
Registration of the application and submission of a package of documents.

After that, you will need to wait for the decision of another bank. If the answer is positive, then the amount necessary to repay the old loan is debited from the account of the new, other bank. As soon as the operation is successful, you will need to take a certificate from the former lender stating that the loan has been repaid and there are no complaints about the client.

How does one apply for refinancing a loan from another lender?

Applying for refinancing a loan from another bank is quite simple. The main thing is that the credit history is clean, the documents are correctly executed, and information about the loan that needs to be refinanced is collected in in full.

Each bank applies for refinancing in its own way, but there are some common points. First, you should seek advice on the refinancing service. Secondly, it is necessary to collect all the documents that the other one requests, new bank, including those that confirm the existence of a loan, its repayment according to the schedule, as well as the amount of debt. Thirdly, refinancing occurs only if the applicant for the service meets such criteria as:

Age - from 21 to 65 years.
Citizenship Russian Federation.
Permanent registration in the region where a potential other bank is located.
General seniority- 1 year or more.
Official job for 3 months or more.
Income - must exceed the amount of the monthly refinancing payment by 50-60%.

Note!
If there are delays on the loan to be refinanced, then the application is rejected.

The bank will be more loyal when considering an application for refinancing a consumer loan from another bank from its client - a person who has a deposit or salary card.

In addition to the requirements for the borrower, the bank puts forward requirements for the current loan, such as:

1. there should be 6-12 monthly payments;
2. The contract will expire only after 3-6 months;
3. no prolongation or restructuring has taken place;
4. There are no delays.

What documents are needed to refinance a loan from another bank?

After submitting an application and receiving approval, the refinancing procedure in another bank takes place in the presence of such documents as:

Original loan agreement concluded in another bank;
payment schedule;
consent of the primary lender to refinancing;
a certificate from another bank, which contains the details for transferring money during refinancing, data on the absence / presence of delays, the amount of debt.

Remember!
A certificate from the bank that issued the loan is valid only for 3 days. Therefore, it should be taken immediately before going to the branch of another bank, where refinancing will take place.

Which banks are involved in refinancing loans from other banks?

The number of banks that refinance consumer loans from other financial institutions, mortgages or car loans is small. Therefore, they are all very much in demand.

Knowing in which banks and how loans are refinanced, and using a calculator, you can determine the amount of the monthly payment and overpayment. How this happens, we will consider below.

Conditions for refinancing a loan from another bank

Depending on the type of current loan, refinancing takes place under different conditions.

Mortgage refinancing involves a different, larger credit limit and long term set aside for its repayment. As an example, interest rate varies from 10 to 17% per annum, the maximum loan term is 25 years, and the loan amount is several hundred million rubles.

If there is a refinancing of consumer loans from another bank, then the conditions will be different: annual rate will be slightly higher, and the loan term and credit limit will be lower. As an example, the rate will be 13% per annum, the maximum loan term is 5 years, and the loan amount is 1 million rubles.

Some banks are not happy with the desire of borrowers to repay the loan ahead of schedule. Because if this happens, they will receive less profit. Therefore, before refinancing a loan from another bank, it is worth studying loan agreement and find out if there is a penalty for early repayment of the loan.

Good to know!
Initially, on-lending took place only with the participation of legal entities. But then the conditions for refinancing loans became different - adapted and individuals. However, without a certificate of income, the procedure does not take place.

Even if there was a delay on an existing loan from another lender, some banks are ready to meet halfway and arrange refinancing. This happens if the duration of the delay does not exceed 10 days. This rule does not apply to cases where monthly loan payments were systematically late, as a result of which the credit history was damaged.

With a bad credit history, it makes no sense to find out what documents are needed to refinance a loan at another bank. After all, as a rule, there is a refusal to refinance. However, individuals with a damaged credit history can apply to a microfinance organization (MFI) or use the services of a loan broker who will act as a guarantor to obtain a new loan. But do not count on favorable credit terms. Since MFIs are famous for other, more inflated interest rates.

Conclusion

Refinancing in another financial institution is simple, but time-consuming. Think before you take out any loan. Since in the future it will have to be repaid, possibly with a large overpayment.

More and more every day financial institutions replenish the range of their services with refinancing.

Advice!
However, according to experts, one should apply exclusively to market leaders. To such as Sberbank, Renaissance Credit, VTB 24, Bank of Moscow.

They are aimed not only at conducting profitable activities, but also at helping other clients who find themselves in difficult situations. financial situations. Their approach to the problem of each person allows you to increase your own assets and expand your client base.

Behind last years the number of loans issued in Russia increased exponentially - the use loan funds has become a daily need for many Russians, such people literally fell ill with a credit fever. According to financial analysts, every second Russian applying to a bank for a loan already has at least one outstanding loan, and the number of bank borrowers who have 3 or more outstanding loans is approaching one third of all residents of Russia who borrow money from banks.

Especially for those borrowers who cannot cope with simultaneous payments on several loans, many banks offer a loan refinancing service that allows you to bring together disparate payments and make a single monthly payment without overpaying to different banks. Refinancing a loan allows many people to improve their financial position and even finally get rid of the need for loan repayments.

What is loan refinancing

Refinancing a loan, or as it is also called on-lending, - banking service, implying the issuance of a new bank loan for the full or partial repayment of an existing one. You can refinance a loan either in the same bank where the previous one was taken, or in a third-party bank offering such a service.

Refinancing allows you to reduce the total amount of payments, reduce the interest rate, increase the terms and reduce the amount of monthly payments. In some cases, it is even possible to change the loan currency. Refinancing a loan is especially important for borrowers who have loans from several banks, since through on-lending all loans are consolidated into one, which immediately allows you to significantly save on bank commission payments.

What is important to consider when refinancing a loan

Of course, banks do not undertake to refinance any loans from any borrowers - it is important to confirm your reliability as a payer. In addition, the borrower himself needs to assess the feasibility of refinancing - after all, the new bank will not miss its benefits. Therefore, it is important to take into account the conditions that affect the decision of both the bank and the borrower when determining the possibility of on-lending:

• What is the credit history- it is natural that unreliable borrowers who regularly allow delays in loan payments will receive new loan much more difficult, and sometimes even impossible. Since, when refinancing consumer loans, banks very carefully evaluate the borrower, then to his credit history treat the same.

  Achieve refinancing mortgage loan somewhat simpler, since with a mortgage, the purchased apartment always acts as collateral and the risks of the bank are not as great as with consumer lending.

• Borrower's income- often a bank refuses a potential borrower if the amount of his income has decreased since the receipt of the refinanced loan.
• Does the bank impose a penalty for early repayment of the loan- this is important, as it increases the total amount of payments during refinancing.

  Some banks impose a moratorium on early repayment of the loan, in which case it will not be possible to refinance at all.

• What is the total amount of payments in the new bank following the results of the entire refinancing procedure- do not forget that refinancing is the same loan as any other. Therefore, there may also be hidden payments for servicing a credit account, borrower's life insurance, etc.
• What is total difference in rates on loans between the old and new banks. It is believed that the procedure for refinancing a loan is inappropriate if the difference in rates is less than 2%.

Refinancing a loan at another bank

Not all banks offer loan refinancing services. Most often, there is a situation in which the bank refinances its own borrowers, but does not refinance loans from third-party banks. At the same time, the reverse state of affairs also occurs - borrowers of other banks are refinanced, while this service is not available to their own borrowers. In some banks, it is possible to refinance only certain types of loans - refinancing of consumer loans, or only mortgages, or only car loans.

If you want to refinance your existing loans, but the bank where they were taken does not provide such a service, then do not despair - there are many banks offering to refinance a loan taken from another bank. Most often, it is more profitable to refinance a loan in the same bank where you took it from, but often, the conditions offered by third-party banks are even more profitable than the conditions of the banks that issued this loan.

Most banks that provide the service of refinancing loans from other banks give potential customers the opportunity to determine in advance the conditions for reviewing loan agreements using a loan refinancing calculator. This service, as a rule, is posted on the official website of the bank and is available to all potential customers. By specifying the parameters of loans already taken, the client receives approximate terms of payments after refinancing. Most often, along with the loan refinancing calculator, the online application service for loan refinancing is also placed on the websites of banks. If the results of preliminary calculations suit the client, then he can immediately submit an application and immediately start the procedure for its consideration - without a personal visit to the bank branch.

The procedure for refinancing a loan in another bank must follow a certain algorithm:

1. Borrower applies to third party bank, offering refinancing services, and draws up a new loan in this bank.
2. The new bank transfers the amount of the debt to the bank where the previous loan was taken and repays it in full. If there was a pledge, then it is re-registered to a new bank, and until the moment of re-registration, an increased interest rate is paid on the loan, since the refinanced loan is considered unsecured for the time being. When refinancing a mortgage loan in a third-party bank, a temporary increase in the interest rate cannot be avoided, therefore, in such cases, it is important to strive to refinance in the same bank that issued the mortgage.

   If the new loan exceeds the amount of the repaid debt, then the remaining funds are used at the discretion of the borrower.

3. The borrower makes monthly payments to the new bank in accordance with the terms of the loan agreement.

For a more detailed list of banks offering consumer loan, mortgage or car loan refinancing services, see our dedicated article Loan Refinancing: Banks Providing This Service.

Thus, if the burden of paying off loans has exceeded your financial capacity, you need to contact the bank and consider refinancing the loan (or loans, if you have more than one). The main thing is to do it in advance - before delays in payments are allowed, and your credit history will be spoiled. Initially, we recommend contacting the bank that issued the loan for the refinancing service, and resorting to the services of other banks only if such a service is not available.

• 1 Refinancing loans received from other banks
  • 1.1 Benefits of refinancing
  • 1.2 When is it advisable to refinance in another bank?
  • 1.3 In what case can they refuse to refinance a loan in another bank?
• 2 Bank of Moscow - refinancing loans from other banks
• 3 Refinancing loans from other banks in the MCB
• 4 Refinancing program at Sberbank
• 5 Refinancing at Raiffeisenbank
• 6 Refinancing loans from third-party banks at VTB24

Today, many people are interested in how it is legal not to pay a loan if there is nothing to pay, what are the statute of limitations for collecting debts on loans, etc. Such interest is not surprising, since many borrowers lost their jobs and, accordingly, their permanent income due to the crisis. Below we will talk in more detail about refinancing, in which cases it is profitable to do it, and in which it is not, where it is better to apply and what documents will be needed.

Refinancing of loans received from other banks

Refinancing is the receipt of a new loan on more loyal terms for partial or full repayment of the previously received one. Get one like this new loan It is possible both at the former creditor, and in other banks. The first option is not always feasible, since not all banks practice the refinancing program. In the second case, the client should proceed as follows:

1. Collect required package documents and apply for a loan in a new bank.
2. Wait until the new lender transfers the necessary funds to close the loan to the old bank.
3. If there was a pledge on the old loan, then it should be re-registered to a new bank.
4. If the amount of the new loan exceeds the balance of the previous one, then the difference can be used at your discretion.
5. Make a monthly payment according to the agreement to the account of a new creditor bank.

In the case of a pledge, during the period when it will be re-registered to another bank, the borrower will accrue interest on a new loan at an inflated interest rate, since it will be unsecured. After renewal collateral credit terms will be more loyal. If refinancing takes place in the same bank, then there is no need to reissue the collateral, which will save time and money. Therefore, if the question arises “in which bank is it better to take a mortgage”, the possibility of refinancing should also be taken into account, and not just low interest rates.

Benefits of refinancing

• Opportunity to get better credit terms by lowering interest rates.
• The ability to reduce the monthly payment, and hence the financial burden on the family budget, by increasing the loan term.
• Possibility to change the loan currency.
• The ability to replace several existing loans with one.

When is it advisable to refinance in another bank?

Before refinancing at another bank, you should weigh all the pros and cons, that is, the savings from lowering the annual interest rate should exceed the costs of processing and servicing a new loan transaction. The borrower needs to clarify a number of important details:

1. What will be the penalty for early repayment of an existing loan.
2. What will be the financial losses when applying for a new loan in another bank.
3. What will be the difference in interest rates and commissions.
4. Is there a moratorium on early repayment of the loan?
5. Is there a ban on early debt repayment.

The last point is very important, because if early repayment is not provided for by the contract at all, then it will not be possible to refinance the loan. If there is a moratorium on early refunds, then you will have to wait for it to end.

Advice: you should not start the refinancing procedure at another bank if the difference in rates on the previous and new loans is less than two percent.

In what case can they refuse to refinance a loan in another bank?

In the case of on-lending, the borrower goes through the same verification procedure as usual, that is:

It's important to know! Franchise catalog is open on our website! Go to directory...

• The bank checks its solvency. The confirmed income of the client should be enough to ensure a decent existence (purchasing food, clothes, medicines, raising children), pay utility bills and make timely loan payments. If the client has a small salary, then a new loan may be refused.
• The bank checks the customer's credit history. To do this, an official request is made to the National Bureau of Credit Histories. If the client has previously had problems with banks or has existing delays, then most likely there will be a refusal to issue a new loan. Therefore, it is very important to make monthly payments on time so as not to spoil your credit history. To avoid delays and penalties in the event of financial problems, you can quickly borrow money from friends or relatives or from the Quick Money MFI.

Bank of Moscow - refinancing loans from other banks

Most recently, the management of the Bank of Moscow announced new program refinancing. According to it, customers of other banks can refinance in the Bank of Moscow on more favorable terms. Can be combined into one consumer loans, mortgages and card debts. It does not matter the currency of the loan. When refinancing a loan at the Bank of Moscow, a recalculation will be made into the national currency at the current official rate. The product rate will be 15.9%. The term of the pooled loan is not more than seven years. Maximum amount new loan should not exceed three million rubles. It is assumed that part of the funds will go to repay the debt on an existing loan in another bank, and part may become a new loan. A loan from another bank must be issued at least six months ago or more, so that you can assess whether there were delays or not. Accordingly, if they were, then they should be insignificant, otherwise there will be a refusal in a new loan. In order to refinance a loan at the Bank of Moscow, it will be necessary to present an agreement on existing loans from other institutions.

Refinancing loans from other banks in the MKB

The conditions for refinancing loans issued by third-party banks are as follows:

• Annual interest rate in national currency- from 16%.
• The maximum loan term should not exceed 15 years.
• The maximum loan amount is 2 million rubles.

A package of documents required to refinance a loan from another bank in the MCB:

1. Help about current state loan.
2. Application for early repayment of a loan.
3. A copy of the current loan agreement.
4. Details of a third-party creditor bank.
5. The borrower's account number with a third-party bank.

Refinancing program at Sberbank

Refinancing at Sberbank implies the following conditions:

• The rate is from 15.9% per year. It is possible to reduce this figure after confirming the full repayment of loans in third-party banks.
• Loan term - from three months to five years.
• The loan amount should not exceed one million rubles.
• Minimum amount loan - 15 thousand rubles.
• There is no need to provide a deposit.
• The fee for a new loan is 0%.

In this case, it is possible to take a loan from Sberbank without a certificate of income. This will require:

• Prepare Required documents.
• Fill out a loan application.
• Transfer all of the above to Sberbank.
• Wait for an affirmative answer.

A decision on a request for refinancing loans from third-party banks is made within two business days.

Refinancing at Raiffeisenbank

The refinancing program at Raiffeisenbank implies obtaining more favorable mortgage lending conditions. Re-crediting will be possible under the following conditions:

• The loan is issued in national currency.
• The maximum amount of a mortgage loan under the mortgage refinancing program in other banks will be 26 million rubles, but it should not exceed 85% of the market value of the collateral.
• The minimum amount of a mortgage loan under the mortgage refinancing program in third-party banks will be 800,000 rubles for Moscow and the Moscow Region, and 500,000 rubles for other regions.
• The maximum loan amount under the program for refinancing loans for any purpose of other banks will be 9 million rubles.
• The minimum loan amount under the program for refinancing loans for any purpose from third-party banks for the Moscow region will be 800,000 rubles, for other regions of Russia - 500,000 rubles.
• The term of a new loan when refinancing a mortgage from another bank will be 1-25 years.
• The term of a new loan when refinancing a loan for any purpose of third-party banks will be 1-15 years.
• There is no fee for issuing a loan.
• Mandatory provision of collateral.
• Annual interest rate – from 11%.

Refinancing loans from third-party banks at VTB24

VTB24 invites everyone to refinance fixed rate 15%. The minimum amount of a new loan is one hundred thousand rubles, the maximum is three million rubles. The loan is issued for a period of six months to five years. It is possible to combine up to nine outstanding loans and credit cards in one common loan. Clients with a good credit history will be 100% approved for refinancing at VTB24. You can get a loan for any purpose.

Save the article in 2 clicks:

Refinancing is a good chance to refinance on more favorable terms in another bank. It is possible to combine several existing consumer loans, mortgages and credit cards at once into one loan. The loan scheme is simple. Will increase the chances of a new loan being approved credit rating borrower and his stable official monthly income, therefore, when refinancing, the client's reputation and good earnings are very important.

If you have taken out a loan but are unable to repay it, the bank may offer refinancing. Now we will tell you how to refinance a loan and where to apply for this.

What is refinancing

Refinancing or refinancing is the amount of money that the bank provides to repay a previously taken loan or loan.

You can refinance a loan either through a bank to which you already owe money, or through another credit institution.

Why do banks offer refinancing?

• Improve the conditions of an already issued loan;
• Extend the period for the return of money to the bank;
• Reduce size monthly payments on credit;
• Avoid debt if the client is experiencing temporary difficulties.

It is beneficial for the bank when you owe it and pay interest on the loan. That is why you sometimes get calls from other banks, they offer you to take a loan at a low interest rate and pay off the old debt. Then a new bank will start making money on you.

The loan refinancing agreement is drawn up at the bank and differs from a typical loan agreement. The conditions stipulate that the amount taken can only be used to pay off the existing debt to the bank. That is, you cannot spend the money taken on the terms of refinancing for other purposes.

Bank requirements for loan refinancing

Let's say right away that not all banks agree to refinance a client's loan and may refuse you such a service. Most often, those users who do not fall under the requirements of the bank receive a refusal.

Standard bank requirements for refinancing a loan:

• The age of the client is over 21 years old, but not more than 65 years old;
• Citizenship of the Russian Federation;
• Official employment, confirmed by an entry in the work book and a certificate from the place of work;
• At least one year of work experience at the last place of work;
• Monthly income exceeds loan payments by 2-3 times;
• Permanent registration at the location of the bank;
• Good credit history;

In some banks, a prerequisite for refinancing a loan may be the presence salary card or active deposit opened in the same organization.

The refinancing service may be approved if:

• The client has paid the loan regularly for the last 6–12 months;
• More than 6 months left before the expiration of the loan agreement;
• There was no restructuring or prolongation of the loan.

If at least one condition is not met, then you may be denied a loan refinancing.

Documents for loan refinancing

First you need to apply for loan refinancing along with a package of documents. Here is their list:

• Original loan agreement and payment schedule for it.
• A certificate from the bank on the availability of a loan that issued it, if you draw up a refinancing agreement with another financial institution. Please note that the certificate is valid for only 3 days. If you use the refinancing service in the same bank where the loan was taken, then such a certificate is not needed.
• Details of the organization for transferring funds to the borrowing bank, if the refinancing agreement is drawn up in another bank.
• An extract on the presence of delays on the loan and on the amounts of delays.
• The full amount of the refund, including commission, fines, delays and interest.
• The consent of the lender to refinance the loan. This certificate can be taken from the bank where the loan was issued. The document is valid for 7 days, so hurry up to submit it to the organization that agreed to refinance your debt.

After submitting all the documents to the bank, your application will be reviewed and studied by specialists. Employees of the financial institution will inform about the decision within 7-10 days. If the application is satisfied, then the money will be transferred to the bank where the loan was originally issued in 3-5 days. Total refinancing will take a maximum of 15 days.

How is a loan refinanced?

Refinancing of the loan takes place in four stages.

Stage 1. Signing a new loan agreement

If the bank has approved the refinancing application, you will be invited to sign a new targeted loan agreement. The subject of the agreement will be the refinancing of the existing debt. This means that you cannot use the money under this agreement for your own needs.

Stage 2. Re-registration of documents for a loan or loan

The right to own real estate or other property, on the security of which the loan was originally taken, passes to the refinancing bank of the organization to which you now owe.

Stage 3. Preparation of payment documents

These are standard payment orders, which contain the details of the beneficiary bank and the amount. If you had several loans, the bank will issue the same number of payment orders and close all your debts to other organizations.

Stage 4. Transfer of the client to a new bank

When your loan to another bank is closed, new obligations come into play. The debt has not disappeared, but only moved from one bank to another. You still have to repay the loan, but under new conditions.

And what's the catch?

The bank is always set to make a profit and pursues its own interests. By drawing up a loan refinancing agreement, you receive new obligations:

• Payment of a commission for obtaining a loan or granting a loan, as well as purchasing insurance;
• If you need to notarize documents, then these costs will be borne by you;
• Reassessment of real estate if the loan is secured by housing.

And most importantly, you will have to return a large amount bank for refinancing the loan, albeit for a longer period.

Should I refinance a loan?

Sometimes refinancing a loan is the only way not to get into a debt hole, so the client has no choice. Don't be afraid to take out a new loan, but do it wisely.

Study the conditions for refinancing a loan in several banks, and only then apply. different banks can offer you different interest rates and loan repayment terms. Choose the most suitable, and only then collect the documents.

Share article

Evgeny Smirnov

# Refinancing

Features of a financial transaction

You should not refinance small consumer loans in the hope that the re-loan rate will be lower - the cost of it will cover any benefit.

Article navigation

• How to get refinancing
• When is refinancing needed?
• What parameters play a role
• Stages of the on-lending process
• Refinancing procedure: what you need to know

Banks regularly enter the market with attractive borrowing rates, many of which, upon closer inspection, are profitable solution for debtors. One of them is refinancing (refinancing). In fact, this is the same loan issued to pay off the old debt, but on new terms. Who is it suitable for?

First, problem debtors. Difficulties with finances that have arisen for serious reasons (layoff, illness, etc.) lead people to overdue debts to banks. Refinancing gives you a chance to stop accruing late fees, pay off your old loan, and thereby return to a normal payment schedule and improve your credit history.

Secondly, bona fide borrowers. The new loan is taken for more low interest leading to lower monthly payments.

Refinancing as a profitable banking product is suitable for almost all debtors. Therefore, the topic of how the loan is refinanced is gaining more and more popularity.

How to get refinancing

A future client, before taking a re-loan, must fulfill a number of mandatory conditions. First you need to analyze your current credit. You can refinance any type of loan (consumer, mortgage, etc.), but not in all banks. Alone credit institutions specialize in mortgage refinancing, others specialize in foreign currency loans.

The main requirements are as follows:

• Banks work with bona fide borrowers and those debtors who have been regularly paying according to the schedule for a long time (making 6-12 payments), but for good objective reasons they have lost their way. If the delay lasted from 10 days, then they can be a reason for refusal.
• Financial institutions do not take on borrowers, credit relations which arose earlier than 6 months and end in the next 3–6 months.
• Previously, old debts were not extended or subjected to restructuring. The presence of such manipulations in the past indicates that the financial situation of the client is unstable and threatens to default on repayment terms.

In part documentation conditions in all organizations are usually standard and identical to the issuance of a simple loan.

Compare	GPS(%)*	Maximum amount	Minimum amount	Age limitation	Possible dates
	11.99 %	4 000 000 ₽ Application	50 000 ₽	21–70	2–5 years
	13 %	1 000 000 ₽ Application	30 000 ₽	19–75	2–7 years
	11.99 %	3 000 000 ₽ Application	100 000 ₽	22–65	1–7 years
	11 %	1 100 000 ₽ Application	45 000 ₽	21–75	0.5–7 g
	10.2 %	27 000 000 ₽ Application	300 000 ₽	21–75	1–25 y.
	10.2 %	1 500 000 ₽ Application	500 000 ₽	21–75	1–25 y.

* APR - annual interest rate (minimum).

When is refinancing needed?

• With two or more loans. Refinancing helps to combine several contracts into one, which will have single payment and interest.
• In mortgage relationships with high rates. Even a 1-1.5% reduction in bank fees will help to save significantly due to a long repayment period.
• With foreign exchange loans. Due to the fact that the growth of the dollar and the euro has exacerbated the debt burden of people, the on-lending service can convert loans into rubles and reduce monthly payments.
• If you need free funds. Many banks provide a certain amount when re-loaning, usually more by 50,000–100,000 rubles. the one required to repay loans.
• If necessary, lower monthly fees. Such a step is unprofitable for the client, since it increases the total overpayment, but serves as a temporary saving measure in times of crisis.
• To release collateral. If there is a need to sell real estate pledged on an old loan, then a re-loan will allow you to pay off debts and free up housing.

The purpose of refinancing is to pay off old bank debts; it is prohibited to cover other expenses with a new loan.

What parameters play a role

Financial institutions conduct an analysis of a potential client according to the following criteria:

• Citizenship. Citizens of the Russian Federation can resort to refinancing.
• Age. On-lending is available to citizens from 21 to 65 years old.
• Employability. Re-loans are issued to citizens who have a permanent official income.
• Experience. Potential clients must work at the last workplace for more than 6 months, while a total continuous experience of 1 year is required.
• Income. If regular expenses, together with monthly contributions, take away more than half of the salary or other income, then the banks will definitely refuse.
• Registration. Registration at the location of the bank is a prerequisite.
• Credit history. The presence of numerous disruptions in the repayment schedule of loans will lead to the fact that the application for a loan under the refinancing will be rejected. You can try your luck in other financial institutions, since the number of days of delay, which affects the decision to re-loan, is different everywhere. An important role is played by the reason for the violation of the schedule: illness, dismissal, relocation, technical failures, etc.

Before you decide to refinance, you need to weigh all the pros and cons. Expert advice and online calculators on banking websites will help you see the proposed conditions in specific numbers. In addition to monthly payments and overpayments on a loan, commissions and insurance fees should be taken into account so that the latter do not “eat” the difference in loans in the amount.

If, as a result, all comparisons and calculations led to obtaining refinancing, then the next step will be the preparation of a package of documents:

• application in the prescribed form;
• the passport;
• loan agreement for the old loan in the original; a payment schedule is attached to it;
• a certificate from the bank with details of delays, if any;
• consent of the existing lender to the re-loan.

After the potential client has provided the necessary documents in full, the bank examines them and makes a decision.

There are two main reasons for rejecting an application: delays and insolvency of the borrower.

Stages of the on-lending process

The sequence of actions for refinancing is as follows:

1. The client forms a package of documents and submits it for analysis to a new creditor to confirm solvency.
2. After acceptance positive decision upon application, the borrower applies to his bank to obtain permission for on-lending.
3. The new lender and the client sign a loan agreement, where all the terms of the transaction are prescribed. Attached is a schedule with monthly fees.
4. All other documentation is provided in accordance with the newly concluded loan agreement. If a pledge was issued under a previous transaction, then the bank that issued the re-loan becomes the new pledgee.
5. The newly minted lender transfers funds to the old bank and this completes the refinancing procedure. The borrower acquires obligations under the re-loan transaction.

If the execution of the contract took place with the provision of a certain amount of free funds, then the client has the right to dispose of them at his own discretion.

Refinancing procedure: what you need to know

What pitfalls can citizens expect in the process of on-lending? The catch most often lies in hidden fees and other material costs.

Therefore, even at the stage of familiarization with the banking product, one should take into account what expenses the future borrower will have to bear for loan support, insurance, a notary, and removal of encumbrances from collateral. It is not worth refinancing small consumer loans in the hope that the re-loan rate will be lower - the cost of it will cover any benefit. It may happen that the fines early repayment old credit will negate attempts to save money through refinancing.

If at the stage of analysis by the bank of the client's documentation, the question of a bad credit history arose, the latter needs to make an effort and prove that serious problems were the cause. It is necessary to convince managers of their solvency, perhaps provide a guarantor, put money on a deposit, etc.