How to refinance at a lower interest rate: step by step instrtute

Making a Bank loan, not every borrower can predict their future income. For the duration of the loan agreement can occur in different events, or otherwise affecting the financial viability and solvency of the citizens. After one or two years, the monthly payment may seem like the borrower is excessively high, and further fees on the loan may adversely affect the family budget. From this situation there is a way to refinance at a lower interest rate.

Definition lending

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

• Reduction of the interest rate;
• Increasing term loan;
• Reduction of a monthly payment.

In Other words, if the payments on the loan, the borrower noticed that at other banks loans at lower rates you can refinance at a lower interest rate. This service provides a large number of banks, and therefore have the opportunity to choose most attractive conditions.

Types of loans available for refinancing

Refinancing is available in almost any loan:

• Consumer;
• Car loan;
• Mortgage.

For the above loans have the option to refinance at a lower interest rate in the savings Bank and other major banking organizations.

Most banks are not allowed to refinance credit card. This is due to the fact that a time-bound money back on them does not exist. Under this loan are only those loans which have strict repayment schedule, established at the signing of the loan agreement.

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Reasons for refinancing

To Refinance at a lower interest rate is possible due to formal reasons, to confirm which you want to submit the stipulated documents. Such reasons include:

• Reduced size of the official earnings on the main job;
• Liquidation, reorganization of the company of the employer;
• Reduce employee;
• The dismissal of the employee by the employer;
• Leave to care for a child.

You can Also apply for refinancing, having other reasons for that:

• Conclusion of the pledge of encumbrance (in this case, you can refinance at a lower interest rate on mortgages);
• Combine multiple loans into one;
• Changing the currency of the loan;
• Dissatisfaction with existing conditions on the existing loan.

The refinancing process

Making lending involves several steps:

• The decision of the borrower, which Bank to refinance at a lower interest rate;
• Provide the necessary documents;
• Preparation of Bank agreement for refinancing;
• Transfer of funds to repay the existing loans;
• The closing of the existing credit agreement;
• Receive a certificate confirming its closure;
• Monthly payment under a new repayment schedule.

The Initiators lending

To Refinance at a lower interest rate can be at the borrower's initiative or on the proposal of the Bank. In the first case, the person looking for their own credit institution, collect the necessary documents and provides them to the chosen Bank. In the second case, the credit institution through various notifications, offers customers with a valid credit issue a new loan on the current account.

If the borrower decides to apply to third-party Bank, the latter repays the existing loan and prepares a new. In obtaining refinancing in the credit institution where you hold the original loan, it repayment takes place by the Bank.

Documents required for this loan at the borrower's initiative

In order to independently apply for a refinancing in the third-party Bank, you will need to provide the following documents:

• Passport
• Income statement;
• Current loan agreement with repayment schedule;
• Certificate of absence of debt and overdue payments.

The Bank may accept the customer's request or to deny the issuance of money. It all depends on the credit history of the borrower, his solvency, and the list of submitted documents. To get the maximum chances of getting a refinance, you must provide as many additional documents. They can be:

• Help of additional earnings (not the principal place of work);
• Certificate of real estate ownership;
• Credit history.

To Refinance at a lower interest rate in Raiffeisenbank is possible directly on the official website of the Bank, without leaving home. Form filling in “online”. If the claim is approved, the Department must be approached with a prepared list of documents for getting money.

Refinance Bank offer

In the casewhen the Bank offers the client to arrange refinancing, you will need less paperwork, as the loan is already pre-approved. Therefore, it is possible to refinance at a lower percentage in VTB and other banks. If the borrower has an active loan and makes it regularly payments, the Bank informs it about the credit offer in the following ways:

• Message to the phone number;
• By a call to the hot line;
• Using the ATM when conducting card transactions;
• Through your personal account.

If the borrower was notified by the above means to obtain a loan should contact the Bank branch. You just need to bring the necessary documents, including:

• Passport
• Income statement.

Often the credit organizations make refinancing only on the passport for those customers that:

• Have a salary card of the Bank;
• Faithfully repaid several loans in the credit organizations.

Close existing credit agreement

After making all the necessary documents drawn up a new contract. If refinancing occurs in the Bank of original issue of the loan, the new loan will be credited to the same account. The funds will be available to the customer the next day after the approval of the Bank, and in some cases, and in the day of. In this same date, is the amount charged on account of repayment of the existing loan. Since then, the amount available for use by the borrower. He can spend it for his own purposes, and to repay other existing loans.

When making a refinancing with another Bank the procedure is more durable over time. The credit institution transfers the funds to the account of the applicable loan. As soon as the money arrives to him, the customer should make an application for full early repayment. The next day, the loan will be repaid, to confirm what you need to take a certificate of full early repayment. The borrower must close the account and take the original supporting reference.

With the resulting document can be sent to the Bank performing refinancing. After reference will be checked for accuracy, the Bank issues a credit agreement with a new repayment schedule.

Important features lending

If the borrower wishes by using refinancing to pay off multiple loans, the amount received must be allocated between the existing loans. Thus, it is possible to close different types of loans, including credit cards. This method is very convenient, as it allows multiple loans to be. This eliminates confusion in the repayment, as the term will now be United, and the payment is made only once a month.

Any Bank determines, as to refinance at a lower interest rate to a borrower. For multiple clients are different conditions depending on the work experience on last place of earnings brought documents. The more the borrower will provide information about yourself, the more likely it is to get the best deal. This will affect the interest rate and loan term. If the Bank determined the customer's solvency as high, the percentage will be minimal and the period may be extended.

Refinancing can be issued several times during the term of the loan agreement. In this case the refinancing of the existing loan can be issued by only one Bank and only in full. Refinancing a single loan in different banks is not permitted as a partial repayment of the Bank existing debt.

To Issue a new loan to replace the current — that's what it means to refinance at a lower interest rate. This is a banking service that allows borrowers to reduce their monthly expenses. By extending the contract term and reducing the interest rate, the lower the monthly payment, allowing you to more easily dispose of the family budget. Refinancing is becoming more popular, and the number of banks offering it, is steadily increasing.

The design of the refinancing does not adversely affect the borrower's credit history, and conscientious repayment contributes to a further loan on more favorable terms.

Any credit is the way to improve your financial situation with a delay of full payment. In order not to aggravate their condition, it is necessary to choose the most advantageous terms for loans, sometimes changing them.