Top 10 Tips for Choosing a Bank for Loan Refinancing

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Gazprombank

VTB

Alfa Bank

Raiffeisenbank

Home Credit Bank

Promsvyazbank

UralSib

Post Bank

Moscow Industrial Bank

Total voted: 3

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At what percentage the current debt is taken, what amount is repaid and how much is to be paid in the following months - few people remember this behind the routine of monthly payments. A loan agreement will help to refresh the parameters of the once concluded agreement. If it is lost, you can get a duplicate through an application at any convenient bank branch.

In the document, note the interest rate, payment amounts and the total overpayment - it is better to write down the numbers, they will still come in handy. Pay attention to the payment schedule: it has a monthly breakdown with a specific indication of how much of the payment goes to repay the loan, and how much goes to pay interest. They make up the bulk of the first payments.

The refinancing service is resorted to when market conditions change and the bank reduces interest rates on credit lines. For example, in 2020, the average rate for current mortgages was 10%, and it was possible to refinance a loan at 8%. Thus, a borrower with a debt of 2.5 million rubles. for 18 years, he received savings on monthly payments of more than 3 thousand rubles, and on the total overpayment - 674 thousand rubles.

Debt reduction can be done in another way - by extending the loan term. But at the same time, some banks raise the rate rather than lower it, which is why the total overpayment increases significantly. If the task is to reduce the payment, it is better to find a program with a minimum percentage.

Early repayment a loan is often limited to a considerable amount of early payment or a long period of prior notification of intent. If the borrower sees that he can repay the debt faster, he should think about refinancing on more convenient terms.

Consolidation of multiple loans makes their service more convenient and profitable. You can refinance absolutely any consumer loans, mortgages, car loans, bank card loans, etc. In this case, the bank either pays all debts on its own or issues a targeted cash loan for the client to pay them off on their own.

Foreign currency change on the ruble makes sense in the long run. However, in order to complete the re-crediting procedure, banks often require collateral, significantly increase the rate and set their own conversion rate. It is important to calculate the benefits and risks as accurately as possible.

Refinancing is provided in two forms - internal and external. Internal recrediting involves obtaining a new loan from the same bank where the old one was originally taken. It is not always offered to customers, on the contrary, “their” bank employees often try to dissuade the borrower from credit reloading.Reluctantly, fresh loans are also refinanced, so it is recommended to apply no earlier than 6 months of conscientious payments, and, without hiding this, to several organizations at once.

External refinancing carried out by a third-party bank interested in the flow of customers, and therefore ready to launch a counter program with a significant reduction in the rate. A potential borrower needs to be prepared to confirm their solvency and collect an extended list of documents. But the risks of refusal in this option are the least - it is considered a more reliable debtor than a novice borrower.

Banks often refuse to refinance individuals for various reasons, the most common of which is non-compliance with the requirements. The client must be a citizen of the Russian Federation up to 55-60 years old, registered in a locality where a bank branch is physically present, and have a regular income.

Credit history is also important, especially the absence of litigation for non-payment of loans earlier. It will be mandatory to check the absence of debt on current obligations for 12 months, the remainder of their validity period (if 2–3 months remain before the loan is closed, they will refuse to refinance), the absence of debt restructuring during their validity period.

The final refinancing rate almost always differs from the figures indicated in advertising or on the official website.The loudly voiced 10% easily turns into 13 or even 15% if the borrower confirms his income with a certificate not for 2-personal income tax, but in the form of a bank.

If the mortgage is refinanced, you will have to spend money on re-registration: re-assess the property, pay notary services, state duty, insurance. In the case of a car loan, in which the car acts as collateral, it will also have to be reissued. While the procedure continues, the bank indicates a rate higher than the agreed one and reduces it only after the re-registration of the collateral.

In the language of an accountant, it's time to reduce the debit to the loan, that is, to compare the current costs of the loan with those expected after refinancing. To do this, you should refer to the numbers that were obtained thanks to our first tip - the size of the rate, the amount of the balance, the monthly payment and the total overpayment.

In a separate column, it is worth noting the similar parameters of 2–3 banks, the conditions of which coincide with the tasks set. It is unlikely that many applicants will be selected - most institutions are eliminated at this stage. It is required to calculate the monthly payment - manually or using the online calculator on the official website. Their calculations, according to user reviews, can be trusted, the difference in amounts during rechecking is minimal.

The language of numbers is dry and precise - online calculation usually clearly shows which bank is more profitable to refinance. It remains to be seen that it is reliable. This is important - if the creditor bank bursts, the debtor has to make payments through the notary's deposit, which is problematic and again leads to new expenses. To check the reliability, we advise you to perform one or more steps.

License check needed to avoid running into a fake bank. It is best to do it through the official website of the Central Bank cbr.ru in the "Information on credit institutions" section. Information about the date of registration, BIC, financial statements, etc. is freely available to the user.

The financial condition of the bank can be determined from the reports that are regularly published on the same site. Key indicators of success are making a profit from year to year, a growing or at least stable amount of assets, capital adequacy ratios of at least 8% and instant liquidity of at least 15%.

The easiest way to verify the reliability of a credit institution is to look at the TOP-20 banks compiled by rating agencies and financial and economic publications like Kommersant and specialized online resources.

When the debt is being refinanced for the long term, it makes sense to check how convenient it will be to make payments and control the repayment of the loan. Ideally, if a bank offers individuals online access to credit accounts with the possibility of receiving statements, SMS and e-mail notifications, and on-line consulting by specialists. Usually, all these services are offered free of charge, but the amount of the commission when paying in cash or transferring a payment from a particular card should definitely be clarified.

It will not be superfluous to call the hotline - does the support service respond quickly? This can be useful, especially if you urgently need to solve a problem. The physical branch should be located near the place of residence or permanent work. This is important, otherwise, sooner or later, a moment may come when it will be difficult to pay off the current debt on time precisely because of the long distance.

Although interest rates on loans today, according to experts, are at historic lows, refinancing can still cost a pretty penny. So, you need to take into account that you will have to pay more by 1‒2% at the stage when the borrower takes a mortgage on property from one bank and draws up a pledge for the one he has chosen.

Otherwise, the Federal Tax Service may consider that this is another property and deny the right to a property tax deduction (from January 1, 2014, it is provided only for one object).

Another important question is whether it is possible to refinance a mortgage, for the repayment of which maternity capital was used. The nuance is that the families, when initially applying for a mortgage loan, undertook an obligation to the Pension Fund to formalize common ownership. If within six months after the repayment of the loan, shares were not allocated to all family members, the violator was threatened with a fine in the amount of the mother's capital, and banks did not work with such borrowers. Today, the possibility of refinancing is open for them, since the change of the pledge holder occurs at one moment.

After analyzing the input data and calculating the possible benefits, the bank, most likely, was chosen. Before contacting him, you should prepare a package of documents.

In addition to this list, banks may request other documents. A sample application for refinancing is usually provided on the website. It should clearly indicate the amount, the desired conditions for obtaining a loan, as well as the option to secure the loan. Competent and conscientious completion of all columns in the absence of delays in current payments increases the chances of approval of the transaction.