How to refinance for a smaller percentage: step by step instruction

Making out a bank loan, not every borrower can predict their future income. During the validity of the loan agreement, various events may occur that somehow affect the financial solvency and solvency of citizens. After one or two years, the monthly payment may seem excessively high to the borrower, and further payment on the loan may have a detrimental impact on the family budget. From this situation there is a way out: re-credited for a smaller percentage.

Definition of on-lending

Refinancing or refinancing is a service to change the terms of the current agreement with the bank. It consists in:

• Lowering of the interest rate;
• Increasing the credit period;
• A decrease in the monthly fee.

In other words, if during the loan repayments the borrower noticed that loans are issued in other banks at lower rates, you can refinance at a lower interest rate. This service is provided by a large number of banks, and therefore it is possible to choose the most attractive conditions.

Types of loans available for refinancing

On-lending is available for almost any loan:

• Consumer;
• Car loan;
• Mortgage.

On the above loans, it is possible to refinance at a lower interest in Sberbank and other major banking institutions.

Most banks are not allowed to refinance on credit cards. This is due to the fact that there are no clear deadlines for repaying money on them. Under the effect of on-lending, only those loans that have a strict repayment schedule established when signing a loan agreement fall.

Reasons for on-lending

It is possible to repay a smaller percentage due to official reasons, for the confirmation of which it is necessary to submit the agreed documents. Such reasons include:

• Decrease in the amount of official earnings at the main place of work;
• Liquidation, reorganization of the employer's company;
• Reduction of the employee;
• Dismissal of the employee on the initiative of the employer;
• Holiday to care for the child.

You can also apply for on-lending, having for this purpose other reasons:

• Withdrawal of collateral from encumbrance (in this case, you can re-lend for a smaller percentage of the mortgage);
• Consolidation of several loans into one;
• Change in the loan currency;
• Dissatisfaction with the existing terms of the existing loan.

Refinancing procedure

Execution of on-lending includes several stages:

• The decision of the borrower in which bank to refinance at a lower interest;
• Provision of necessary documents;
• Drafting of a bank contract for refinancing;
• Transfer of funds to repay the current loan;
• Closing of the existing loan agreement;
• Obtaining a certificate confirming its closure;
• Monthly payment according to the new repayment schedule.

The initiators of on-lending

Re-credited to a smaller percentage can be initiated by the borrower or at the suggestion of the bank. In the first case the person independently searches for the credit organization, collects the necessary documents and provides them to the selected bank. In the second case, the credit organization, through various notifications, invites customers with a current loan to issue a new loan under the current account.

If the borrower decides to apply to a third-party bank, the latter repays the current loan and draws up a new one on different terms. When refinancing is received in the credit institution in which the initial loan is opened, it is repaid by the bank itself.

Documents required for on-lending on the borrower's initiative

In order to independently apply for on-lending to a third-party bank, you will need to provide the following documents:

• passport;
• Certificate of income;
• The current loan agreement with the repayment schedule;
• A certificate of absence of arrears and late payments.

The bank can accept the client's request or refuse to issue money. Everything depends on the credit history of the borrower, his solvency, as well as the list of documents submitted. In order to get maximum chances for refinancing, you need to provide as many additional documents as possible. They can be:

• Certificate of additional earnings (not from the main place of work);
• Certificate of ownership of real estate;
• credit history.

Re-credited to a smaller percentage in Raiffeisenbank can be directly on the official website of the bank, without leaving home. The form is filled in online. If the application is approved, then the branch should be approached with a prepared list of documents for receiving money.

Refinancing by bank offer

In the event that the bank independently offers the client to issue on-lending, less documents will be required, since the loan is already considered pre-approved. In this way, you can easily refinance for a smaller percentage in VTB and other banks. If the borrower has a valid loan and makes payments on it correctly, the bank informs him about the loan offer in the following ways:

• Message to the phone number;
• A call from the hotline;
• Through an ATM at operations with a card;
• Through the personal cabinet.

If the borrower was notified in the above ways, in order to obtain a loan, it is necessary to apply to the bank branch. With you need to take the necessary documents, including:

• passport;
• Certificate of income.

Often, credit institutions make out refinancing only on a passport for those customers who:

• Have a salary card of the bank;
• Have conscientiously repaid several loans in this credit institution.

Closing of the current loan agreement

After the registration of all necessary documents, a new contract is drawn up. If on-lending takes place in the bank of initial loan registration, the new loan is credited to the same account. The funds will be available to the client the next day after the application is approved by the bank, and in some cases, on the day of registration. On the same date, there is a write-off of funds to repay the current loan. From now on, the amount is available for borrower use. He can spend it for his own purposes, and can pay off other existing loans.

When refinancing in another bank, the procedure takes longer. The credit institution transfers funds to the account of the current loan. As soon as the money comes to him, the client must make an application for full early repayment. The next day the loan will be repaid, in order to confirm that it is necessary to take a certificate of full early repayment. The borrower must close this account and take the original confirmatory certificate.

With the received documents it is possible to be sent to the bank, carrying out on-lending. After the certificates have been verified for reliability, the bank issues a loan agreement with a new repayment schedule.

Important features of on-lending

If the borrower wants to repay several loans with the help of refinancing, then the amount received must be distributed among existing loans. Thus, you can close various types of loans, including credit cards. This method is very convenient, because it allows several loans to draw one. This eliminates confusion in redemption, since the term will now be uniform, and payment is made only once a month.

Any bank independently determines how to re-lend at a lower interest to a specific borrower. For several clients different conditions are offered depending on the length of service in the last place, earnings, documents brought. The more the borrower provides information about himself, the more likely to get the most favorable terms. This will affect the interest rate, as well as the term of the loan. If the bank has identified the client's solvency as high, then the interest will be minimal, and the period may be increased.

Re-crediting can be executed several times during the validity of the loan agreement. At the same time refinancing of the current loan can be executed only by one bank and only in full. On-lending to one loan in different banks is not allowed, as is the partial repayment of the existing debt by the bank.

To issue a new loan in exchange for the current one - that's what it means to refinance at a lower interest. This is a banking service that allows borrowers to reduce their monthly spending. By extending the term of the contract and reducing the interest rate, the monthly payment is reduced, which allows you to more freely dispose of the family budget. Over-lending is becoming more popular, and the number of banks offering it is steadily growing.

Refinancing design does not adversely affect the borrower's credit history, and in the case of bona fide redemption further contributes to obtaining a loan on more favorable terms.

Any loan is a way to improve your financial situation with a deferral of full payment. In order not to aggravate your condition, it is necessary to choose the most favorable conditions for loans, sometimes changing them.