As a rule, each borrower who decides to issue funds on credit does this in connection with the urgent need to solve a number of everyday problems. However, no one is safe from the occurrence of health problems, job cuts and similar unforeseen situations that could adversely affect your financial condition. As a result of this, a person simply does not have the ability to fulfill his obligations properly. In this case, the bank may offer a consumer loan refinancing. By the way, the borrower can apply for a similar service to another institution that will provide him with more favorable conditions.
What is refinancing?
In the banking world, consumer credit refinancing is called refinancing. In a broad sense, this is the conclusion of a new loan agreement to repay past obligations to the organization. And in our case, this is the processing of credit obligations in a third-party organization in order to pay off previous debts in banks.
According to the feedback of the borrowers, it can be noted that the debtor uses this service in the bank, where he issued the initial loan, quite rarely. Most often they use the services of other financial institutions.
In addition, it is not only borrowers who are unable to pay according to the provided conditions who are in a hurry to apply for consumer loans in Moscow and other big cities, but also simply customers who are tired of spending their time running to different banks and paying off debts under several existing agreements at once.
Sometimes in big cities it takes a lot of time to make monthly payments, and there is not always the possibility of paying off a debt using online technologies. Therefore, on-lending to consumer loans in Moscow, for example, is quite popular.
Using refinancing, you can collect debts from all banks, combine them and pay the total amount of debt in one financial institution. Another advantage of this service is a reduced interest rate and reduced overpayment. In terms of economy, it’s a very profitable service.
On what conditions can I be re-credited to Sberbank?
In Sberbank, as in many banking institutions, there is a refinancing program that sets forth its requirements, which the borrower must meet. So, in order to apply for Sberbank consumer loans refinancing, the borrower must be from 21 years to 75 years. In addition, he must have a total working experience over the past five years - at least a year.
Sberbank provides on-lending of consumer loans on very favorable terms, so many borrowers are in a hurry to take advantage of this offer. The minimum term of the contract is 3 months, and the maximum does not exceed 5 years. For all loan obligations, the amount should not be more than 1,000,000 rubles. As a rule, each application is considered separately, since all the data submitted is thoroughly checked. On average, the interest rate on a loan fluctuates around 17.5%.
Is it beneficial to refinance a consumer loan?
Unfortunately, it is impossible to unambiguously answer the question of the advisability of refinancing. In many ways, the answer depends on the specific situation.For example, one can imagine a case when a person applied for a certain loan, but after a year he lost his job and realized that he was not able to continue to pay the debt, in accordance with the original agreements. In this case, the refinancing procedure may be his last chance to maintain a reputation as a reliable borrower.
Some carry out refinancing due to the fact that they want to overpay less on previously executed contracts, since some banks offer really reduced interest rates, which cannot but attract potential customers. However, in this case, caution must be exercised, since sometimes the bank begins to seriously overestimate the requirements. This is due to the fact that re-lending to a consumer loan always means a certain risk. As a rule, a financial institution is at risk. Indeed, not every borrower in this case boasts a brilliant credit history. Therefore, wanting to insure itself, the bank lays the cost of risk in the interest rate, which implies an overpayment of an order of magnitude higher.
Who can assist in the re-lending of consumer loans?
The modern credit market has such a complex and complicated system that sometimes even an experienced borrower is lost in his calculations and cannot make a competent decision on the issue of interest. Therefore, the help of a credit broker is very relevant today. It helps both in obtaining a consumer loan, and in making a refinancing transaction.
Many borrowers resort to such assistance when they plan to refinance consumer loans. Reviews about the services of brokers are contradictory. It all depends on the person providing such services. It will also help determine the question of whether it is beneficial to refinance a consumer loan in a particular case.
How is the collaboration going?
To get started, the borrower must provide the selected loan broker with all the data for checking the credit history, tell the situation. Based on the high-quality analysis and the existing relationships with banking organizations, the specialist will select the best option for the borrower. He acts as an intermediary, therefore, if necessary, he will independently collect all certificates and instruct what is necessary to tell the loan specialist.
How much does this help cost?
Speaking about how the services of this specialist are paid, we can immediately say the following: a real broker always takes a fee for the work done only in case of a positive result. The greater the amount of approval for refinancing, the greater its percentage.
Three Aspects of Refinancing
- Most often, re-lending to a consumer loan is necessary in case of problems with the implementation of the undertaken debt obligations, drawn up for a long term. Since no one has the opportunity to paint his whole life for 5 or 7 years. In the refinancing process, the bank offers more loyal lending conditions with a reduced interest rate, which really becomes profitable.
- The higher the interest rate, the greater the overpayment on the loan. Sometimes a borrower has unforeseen circumstances, and he cannot predict a reduction in income. Therefore, in order to continue to fulfill his obligations, he can refinance a consumer loan, thereby improving his position.
- Having discovered that cooperation with the previous financial organization is not profitable, the landowner may decide to transfer to another creditor. For example, if a person has a contract with some other bank (for example, involved in a salary project), then in order to save as much money and time as possible, the borrower can switch to servicing it.
In any case, the benefits of refinancing should be considered separately for each specific case. Before entering into a new loan agreement, the borrower must weigh the pros and cons. A hasty decision may adversely affect future debt performance.