Do you have a lot of loans? It’s inconvenient to constantly go to banks and keep in mind the information about when which loan to pay? Then this article is for you! It provides step-by-step instructions on how to get a loan to pay off other loans. You no longer have to keep in mind information about a large number of payments, it will be enough to remember one date and amount. Ready to learn how to get a loan to repay other loans? Then we begin our story.
In what cases there is a need to take a loan to repay other loans?
There may be several such situations:
1. Lower interest rate on a new loan. Accordingly, you will have a lower amount of overpayment, which means you can pay off your debts faster and start saving this money for something else or use it at your discretion. Without thinking more about the fact that you need to remember to pay the loan, otherwise there may be a delay, and therefore penalties, a damaged credit history and other troubles.
2. Reduced income, which means the inability to pay loans in the amount in which you paid before. That is, you can take one large loan for a sufficiently long period so that the payment on it is less than the amount of payments on existing loans. Accordingly, you will still be comfortable paying, this amount will no longer hit hard in your pocket, and you can not reduce the standard of living that you are used to.
3. Ease of payment. It is quite difficult to keep in mind all the dates and amounts of payments, sometimes we may lose sight of something. And this annoying mistake can cost us a pretty penny. Because the penalties for late payment of the banks are very large. And even more so, there is not always time to dangle around all the banks, which are usually located at different ends of the city. It’s better to make one big payment once a month than small amounts several times a month. Thus, you will save not only time, but also money. Because you have to get to the bank - money for travel or gasoline if you are driving. Multiply this amount by the number of loans that you pay monthly. And that is not all. The time that you used to spend on going to the banks and back has become free. You can take his work and get additional income or free him for those activities that you like.
When is refinancing profitable?
1. If no more than half of the loan term has passed under the loan agreement. Why is that? Usually in banks, the main amount of interest on the loan is taken in the first months. Accordingly, if you took a loan, for example, for 2 years, and 18 months have already passed, refinancing is not particularly profitable, because most of the interest you have already paid to the bank, you only have to pay part of the main debt. And in the new bank you will again begin to take interest. But in any case, it is better to calculate each loan individually and find out the amount of benefit in order to clearly understand whether it makes sense to start a refinancing procedure or whether it is worthwhile to refuse this service. Because in some cases the game is not worth the candle.
2. The difference in interest rates should be more than 2%, otherwise you will be transported with all the documents, and in the end you will either not receive the benefits from refinancing at all, or it will be so small that all this red tape with documents is not worth it.
3. When combining several loans into one. Because it is necessary to add other freed expenses to the interest benefit.That is, the money that you used to spend on the road to banks, servicing other loans, became your income.
4. If you want to reduce the amount of payment, as mentioned earlier.
1 step. We analyze which banks give loans to repay other loans
So, you have made a choice in favor of refinancing. What to do next? We look through all the banks that give loans to pay off other loans. And where to get a loan to pay off other loans?
Currently, all major banks are engaged in on-lending. Of course, all refinancing programs are different. And the terms of the agreement and tariffs are in any branch of the bank that you have chosen. You can preview them first. Because in one bank it is easy to take out a loan for repayment. In another bank, this procedure can be very difficult. There are many options, choose the one that you like best, and it is better to use all the options to collect complete information about which banks give loans to pay off other loans. Found it? Make a list of banks that are involved in refinancing.
2 step. We select banks that suit us
So the list is ready. We need to choose a bank that gives a loan to pay off other loans that suits us. How to do it? First you need to determine if we are suitable for the bank. To do this, you need to look at the requirements for the borrower and check yourself for compliance with the criteria. Made? Is the list noticeably reduced? The first filtering has passed. The next step is to evaluate which banks fit our criteria. They may be different, depending on the purpose of refinancing. Pay attention to the interest rate and possible commissions. They may be charged for account maintenance, for making a monthly payment, and so on. Are you done? Now calculate each offer individually. What to consider? The benefits that you get from refinancing. Because in some cases, it may be inconsequential. In order not to waste your time, as well as the time of bank employees.
3 step. We make a list of documents that you need to collect
Separately, on a piece of paper write the documents that are needed in each bank to apply. As a rule, this is a passport, a certificate that confirms your income. Some banks need a number of documents. It is better to collect everything at once, so that later you do not have to wait several times until all the necessary documents arrive. This will significantly save your time. Because, as a rule, going for inquiries is not a matter of minutes, it happens that you spend a lot of time on it.
4 step. Preparation of a package of documents
The list of documents is ready. Now is the time to collect them. Go to all the necessary authorities and order the certificates that you need.
As a rule, the waiting time for inquiries is a few days. Therefore, the faster you order them, the faster you can apply. Also do not forget to make copies of the documents in the right amount, if necessary.
5 step. We make a rating of banks that give loans to repay loans of other banks
Not everyone has an understanding of why this is necessary. This is worth explaining. So, when applying for a loan, all mandatory payments that you already pay are taken into account. That is, all your obligations to other banks. In addition, all loan applications that you have submitted recently have been taken into account. Simply put, if you have several applications in different banks hanging for consideration, most often you will get a refusal. Because banks are wary of a person who wants to take several loans at the same time. Currently, many banks use a scoring evaluation system. I.e the first step, the program automatically checks the borrower on the basis of credit history. Then it gives an automatic answer, either positive or negative. And if in doubt, sends an application for review by specialists.
So, we need to choose banks in which you can take a loan to repay another loan. In the first place will be a bank in which we will receive the greatest benefit from refinancing. It is in this bank that we will apply first. And so on. That is, arrange banks in descending order of benefit. In the very last place will be the bank, which is the least profitable for us. Are you done? The next step is to sort the documents.
6 step. Sorting Documents
All documents are collected, all certificates are ready. It's time to sort them. How to do it? You will need a rating of banks and files or daddies. Their number is equal to the number of banks in your ranking. That is, for example, in the first bank you need the following list of documents: passport, individual taxpayer number, social number of individual personal insurance and income statement. Collect all the specified documents in the first folder or file. Accordingly, the documents that you will need in the second bank, collect in a second folder or file. And so on. It should be understood that it is better to choose no more than 3 banks. The maximum needs to be limited to 5. Spread out? It's time to go to the first bank.
7 step. Filing an application
All documents are collected, sorted. It's time to go. Carefully check again if you have all taken the documents and set off. As a rule, filing an application takes a little time. Not more than an hour. However, there may be a queue in the office. Plan your time so that you have 2-3 hours in reserve so that you don’t rush anywhere and not be nervous.
Because a nervous person can cause suspicion in a bank employee. He may think that you are a fraud, since you are so worried, and you will receive an automatic refusal. In other words, the loan officer can check the box “did not pass face control” and you can forget about the possibility of obtaining a loan for the next three months. Because this information is transmitted to the credit bureau, and all banks that will make a request to you at the bureau will see it.
8 step. Pending Decision
If you moved on to this step, then you can be congratulated! The application was successfully submitted, it remains to wait for a response from the bank. The time for consideration of the application varies and depends on the bank where you submitted the application. As a rule, the loan officer voices how long the bank will decide on the application. In many banks, this process is automated, and information about the decision of the bank goes to the phone of the prospective borrower. And in some banks, loan officers themselves call out candidates for borrowers to provide an answer. It is better to check with the loan officer in advance how you can find out the answer.
Is the loan approved? Go to step 9. If not, go to step 7 and apply to the second bank in your rating.
9 step. Signing of documents
Congratulations! The goal is achieved, it's time to sign the necessary package of documents. As a rule, it is quite voluminous. Please note that it is better not to spare time and read the entire contract. This is the key to your safety. Because your signature on the documents will indicate acceptance of all conditions.
Specify where to pay and on what dates, whether there will be reminders about the upcoming payment. Documents signed, all key points clarified? Congratulations, you no longer have to go to many banks to pay off other loans! You don’t have to memorize a bunch of dates when you need to pay a payment. You now have one loan, your goal is achieved!