In the article we will consider how loans are refinanced with delay.
Loans have already become part of our lives. This allows you to get what you want here and now. But, when a borrower has several loans in different banking institutions, it is easy to get confused. In case of late payment, interest is accrued, and if you pass it, the credit history is spoiled.
How is a delay arising?
Credit delays can occur for several reasons, for example, due to illness of the borrower, loss of sources of income, changes in family circumstances (child birth), demotion, reduction in salaries, banal forgetfulness of the client on time to make a monthly installment, and so on.
In case of arrears in payment for several months, the client may find himself in a situation where it is difficult and sometimes impossible to repay them on his own. Then one of the solutions is to refinance the existing loan. However, not all banking institutions are willing to refinance overdue loans. Where it is worth contacting in such a situation, and where it will be possible to renew the debt, we will describe further.
Features and conditions
As practice shows, loan debt most often appears due to client carelessness to the payment schedule and as a result of late payment of regular installments. It is best to refinance an overdue loan at the financial institution in which the loan was issued. Therefore, it is necessary to request debt restructuring. When the borrower's initial bank conditions are not satisfactory (for example, due to high interest rates), he will be able to use the service of another company.
The main feature when reissuing a debt with arrears is that not only the user's loan is transferred to the new bank, but also all the debts on it. Consequently, a new loan should be issued on a more acceptable condition with a long repayment term, for a large amount, at a low annual percentage. However, the main condition for banks that have refinancing programs is the absence of any delays from previous lenders, since no one wants to get in touch with obviously insolvent customers.
Design Instructions
Overdue loan refinancing is a straightforward process. But you should remember the many different important elements so that everything goes well. First of all, you need to know about the design, depending on the chosen option, the methods may differ from each other. For example, when a person applies to a banking institution that issued him a loan, then he will just need to give an ordinary type of application, which will indicate the purpose of applying for a loan.
Bank shares
Often, banks organize promotions that provide for updating an existing tariff plan or adding new ones, thereby reducing costs. In the event that the client decides to contact another financial institution, then when the application for refinancing is submitted, you will need to have an extract with you. It indicates the size of the current debt with the details where the money will be transferred in order to pay off the debt. When a person draws up refinancing an overdue loan, he will have to go through the entire process of obtaining a loan again. Therefore, you will need to provide a whole list of the following documents:
- Passport and copies.
- Any other document that can prove your identity.
- Certificate confirming employment, indicating the amount of income.
- Bank statement, which indicates that the person has open debt.
- Help indicating the total number of days of delay.
- Account number where it will be necessary to transfer borrowed funds.
- Application form to be completed.
- Agreement on a previous loan.
Now we will provide information on how the registration procedure goes.
How is the clearance procedure going?
Refinancing a loan with open arrears can be divided into the following several stages:
- The banking organization accepts the application in order to consider it. It may take two to seven days for the security service, but not more, to make a decision.
- In the event that it seems to the bank that the person’s income is not high enough, they will require him to provide a guarantor or put something as a deposit.
- A banking organization makes a positive decision on refinancing, or, on the contrary, refuses.
- The borrower is required to check the terms of the loan, then sign an agreement, and then get a schedule for making payments.
- The Bank transfers funds as part of a debt payment.
Next, we talk about which banking institutions are involved in the refinancing of loans overdue.
Financial Institutions: Banking Overview
In 2018, the refinancing procedure is possible in the following large financial organizations:
- Citibank offers a loan to repay a loan in other structures on certain conditions. For example, the interest rate should be from 13.5%. A minimum loan amount of one hundred thousand rubles is required. The maximum loan amount is one million. The time to repay the loan is from twelve months to five years. Which banks are involved in refinancing loans overdue, not everyone knows.
- Binbank refinances loans with delays on the following conditions: the percentage of annual overpayment is from 13.99%. The smallest amount is fifty thousand rubles. The maximum loan amount is two million. The terms of refinancing are kept within seven years. Refinancing of loans with arrears in other banks often becomes a way out of a predicament.
- VTB 24 reissues consumer loans with debts on the following conditions: rate of 13.5%, the amount of six hundred thousand rubles or more. The refinancing amount ranges from one thousand to three million. The payment period is up to sixty months. Who else assists in the refinancing of an overdue loan?
- Rosselkhozbank refinances loans with arrears on the following conditions: interest starts at 11.5%, and the minimum amount is ten thousand rubles. The maximum volume is three million, maturity up to seven years.
- Alfa-Bank presents a rather advantageous loan refinancing program with late payments, with a rate of 11.99%, the loan amount is kept within three million, and the service provision period is from one year to seven years.
Reasons to refuse
There are a number of different reasons when refinancing past due loans is considered impossible. The most common of them for rejection as part of the application include:
- The person does not have a permanent job.
- Complete non-compliance of the client with the existing requirements of the credit institution (for example, we can talk about the age of less than twenty three or more than sixty five years).
- The borrower has a bad credit reputation.
- The fact of bringing a physical subject to responsibility in a criminal case.
- Consumer insolvency factor.
Loan refinancing scheme without delay
The refinancing system is considered beneficial for the bank, as the institution receives a conscientious payer who is ready to pay absolutely the entire loan amount. Thanks to this service, the flow of customers is growing significantly, and this, in turn, has a positive effect on the banking reputation, as well as the direct income of the financial institution. A sample refinancing scheme is as follows:
- The borrower makes the main decision on the application of the refinancing service, depending on specific reasons.
- A person asks the bank to change the main clause of the agreement, which relates to monthly payments.
- The borrower selects a bank in which he wishes to complete the procedure and prepares the necessary certificates from the institution of the lender indicating the current debt on the loan.
- The Bank makes a decision and refinances the proposed loan on the most favorable terms, depending on the level of solvency of the client.
How can debt be minimized through refinancing?
Credit terms can always be increased by writing the necessary application to the banking institution. The financial institution is considering this application, and as a result, a new schedule of loan amounts can be drawn up, and the old agreement will be valid.
It is more profitable for a bank to carry out a restructuring procedure, increasing the loan terms, than to keep overdue debts in the amount. For customers, the benefit is also obvious and consists in a significant reduction in financial stresses, which allows you to repay the loan with the least difficulty. You can minimize your debts by replacing a large number of loans with one that will be long-term, and the monthly amount for payment will not become so burdensome for the client.
Conclusion
Thus, refinancing is actually another investment of money in a project or in investment objects into which the client’s funds have already been contributed. So it has now become customary that the term itself refers to the lending market. True, in essence, this definition incorrectly characterizes the process, which is now actually called refinancing loans. But then, if you look from the point of view of the bank, then everything turns out right - the financial institution re-invests money in the borrower.
If you approach the refinancing procedure with attention and study in detail the existing offers from modern banks, then you can find the most optimal solution by significantly reducing the overall balance of debt, changing the currency of the debt. In addition, you can change the main maturity.
In which banks the refinancing of a loan with and without delay is carried out, we examined in this material.
